Gruber: Apple is selling HomePod at a loss

February 2, 2019 by Steven M. Peters

From The Talk Show with John Gruber “The Butts Incident” with special guest John Moltz:

One thing I’ve heard from reliable little birdie [usually Phil Schiller] is Apple effectively sells [the Apple TV] at cost. Like they really are like a $180 box. And you think wow this is amazing, it has an A10 processor which we know is super fast, it has crazy good graphics.

I’ve heard the same thing about HomePod too. Why is HomePod so much more expensive than these other speakers you can talk to? HomePod I actually have reason to believe, Apple actually sells it at a loss. [laughter] I can’t prove it. I don’t think it’s a big loss…

I’ve always thought, I don’t have any source on this other than the oddity of the price of AirPods… that AirPods probably cost like—or did when they debuted—were like a $160 product.

“Or did when they debuted” takes some of the wind out of this scoop, since as Gruber acknowledges everything get cheaper to make over time. He continues:

If you think it’s a problem that these products are so expensive compared to their competition, that too few people buy them, it’s not because Apple is charging too much, it’s because Apple engineered and designed too good of a product.

My take: Apple can afford to sell a few wearables and accessories at a loss because they sell in such (relatively) small numbers. But “too good of a product” doesn’t sound good. It sounds like an invitation to be disrupted. Paging Prof. Christensen.

Thanks to MacRumors‘ Juli Clover for the tip.