Apple (AAPL – Free Report) recently announced that it is rolling out its HomePod minis globally in new countries. It will start selling Apple HomePod mini in countries like Finland, Norway and Sweden from Dec 13. The company will sell its HomePod mini in South Africa from Dec 19 and other countries will follow in fiscal 2023.
Apple stated that it will price HomePod mini at €109, while it will be 1,249 kroner in Norway and Sweden. However, the price may vary for sellers across South Africa.
Moreover, the availability HomePod mini globally across Europe and Africa is expected to improve this Zacks Rank #3 (Hold) company’s competitive position in the smart speaker space. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Markedly, Amazon’s Echo dot device, the company’s most popular smart speaker with Alexa, costs around $24.64 and is one of the cheapest smart speakers in the market currently. The Google Nest Mini, which is also priced similarly to Amazon’s Echo dot, has Apple beat in terms of pricing for almost a similar product.
Apple is operating in a highly competitive space where companies like Amazon and Alphabet are vying for market share with aggressive pricing competition, frequent introduction of products and services and easy availability of products in the market, which users can use to repair their products comfortably.
Although Apple HomePod mini is priced higher than its peers, it is expected to attract new users as it will provide services such as Apple Music, podcasts, radio stations from iHeartRadio, radio.com and TuneIn.
Also, the increasing number of smart homes is driving demand for smart speakers, which bodes well for the iPhone-maker’s Homepod mini. Per MarketAndMarkets data, the global smart speaker market is expected to hit $7.1 billion by 2025.
With the launch of HomePods globally, Apple is banking on its strong Wearables, Home and Accessories sales growth in the coming quarters. In the fourth quarter of 2022, its Wearables, Home and Accessories sales increased 9.8% year over year to $9.65 billion and accounted for 10.7% of total sales. The figure beat the Zacks Consensus Estimate by 4.46% and our estimate of $7.96 billion.
Apple also nearly doubled the number of service centers worldwide. Globally, there are more than 5,000 Apple-authorized service providers with above 100,000 active technicians. This is expected to attract more customers to its products like HomePod mini.
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Apple’s prospects are expected to suffer from disruptions at its Chinese partner Foxconn’s factory in Zhengzhou. We expect AAPL to ship roughly 70 million iPhones in the first quarter of fiscal 2023. The company expects year-over-year revenue growth to decelerate in the fiscal first quarter compared with the fiscal fourth quarter due to unfavorable forex.
However, the broader Computer and technology industry is reeling from the effects of macroeconomic turmoil like rising inflation and recession caused by rising interest rates. The current market volatility affected the revenue-generating capabilities of major tech companies like Meta Platforms (META – Free Report) .
Meta has seen its stock lose 51.5% in the year-to-date period compared with the Zacks Internet – Software industry’s decline of 48.3%.
The slowing economy is likely to trigger cuts in ad spending, which will hurt the revenues of ad-driven Internet stocks like Meta, impacting their bottom-line growth. This downtrend is reflected in META’s share price movement.
The Zacks Computer and Technology sector has plunged 33.2% year to date while Apple shares have done relatively well, down 19% over the same period.
Apple’s Services and Wearables businesses are expected to drive top-line growth in fiscal 2023 and beyond. Services revenues are expected to witness a CAGR of 8.36% between fiscal 2021 and fiscal 2024.
Although Apple’s business primarily runs around its flagship iPhone, the Services portfolio has emerged as the company’s new cash cow. It currently has more than 900 million paid subscribers across its Services portfolio. The plethora of Apple Services available across its smart speaker for homes is expected to attract new customers for its products and drive its market share amid stiff competition.