


Will Apple's HomePod make it in a crowded smart speaker market? Has Apple given Amazon, Google, and others too much of a head-start?

Apple's HomePod smart speaker could be on sale in the next few weeks, with reports that the first shipments have finally left the factories.

HomePod was supposed to be on sale in December for that all-important holiday shopping season, but Apple delayed it at the last minute saying it needed " a little more time before it's ready". But it's likely to arrive soon -- in the US, UK, and Australia, at least.

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Apple needs to be in the smart speaker market because these devices are becoming a key gateway to subscription services like music, can connect with smart home gadgets, and facilitate other activities like shopping and playing games. A lot of that used to be done through the smartphone, with one in three smart speaker purchasers reporting they were spending less time on their smartphone. HomePod will help Apple sell Apple Music and also keep Siri, its digital assistant, relevant: the smart speaker won't replace the smartphone, but it's still a category where Apple needs to perform well.

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Launching late into a new market is seen as a problem for most companies, but it's a tried-and-tested model for Apple: let others establish the market and make mistakes, and then swoop in with a premium product that fixes the problems rivals couldn't solve.

The iPhone wasn't the first smartphone by any means, but Apple brought the various elements together in a winning combination. Similarly, the iPad wasn't the first tablet, while many companies had been trying to get smartwatches right before the Apple Watch appeared.

Different this time?

What's different this time around is that whereas Apple's smartphone, tablet, and smartwatch solved previously intractable problems, that's not so clearly the case with the smart speaker.

Perhaps this is a case of early-2018 hubris, but it's hard to see an obvious failing in the current crop of smart speakers: you speak, and they (mostly) do what you ask.

Sure, voice recognition could be better and natural language processing smarter, but these are incremental advances that will come. There's not an obvious giant leap to make that can put Apple right out in front. Having said that, before the iPhone most people were happy tapping away on tiny physical keyboards and squinting at tiny screens, so we may yet be surprised. Still, we've seen nothing in the HomePod so far that seems to offer the level of innovation offered by the first iPhone.

Another issue is that Apple's rivals have already learned some of its tricks. One of the big breakthroughs for the iPhone (and after it, the iPad) was the almost-accidental emergence of the app ecosystem. This time, Amazon has got in first, allowing third-party developers to develop 'Skills' for its Alexa digital assistant. Some of these are useful, some are trivial, but it means that Apple can't make that play again to get ahead of the opposition. And, although the HomePod will be able to control Apple HomeKit-powered devices, both Amazon and Google have already opened up their platforms to third-party hardware makers, allowing their smart speakers to control or interact with a wide range of smart home and IoT devices.

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Perhaps Apple is hoping that HomePod will appeal to your inner musical connoisseur, who will appreciate that the device has the same chip as the iPhone and uses it for real-time acoustic modelling, audio beam forming, and multi-channel echo cancellation. But there's a hefty price to pay for such premium sound quality and spatial awareness: $349.

That doesn't make HomePod the most expensive smart speaker around, as Google's Home Max comes in at $399. But it is a premium product in a market where prices are dropping. Apple also makes much of how great two HomePods will sound in the same room, but at nearly $700 it may be a long time before most of us can afford to discover that for ourselves.

The price also makes it much more expensive to provide blanket coverage throughout the home -- especially when you consider that Amazon's Echo Dot is $50 at full price, and often cheaper. The HomePod is being positioned more like a hi-fi system than a disposable IoT device.

A premium on privacy

To my mind, that leaves one way for Apple to get ahead in the smart speaker market: by placing a much higher priority on privacy. Apple can do this because it makes a bigger profit margin on its hardware, whereas its main rivals turn user interactions from their lower-cost devices into business opportunities -- Amazon hopes you'll buy more stuff through your Echo, and Google can target you with more advertising. Attention to privacy is a tactic Apple has used with the iPhone to great success - highlighting how it uses end-to-end encryption for iMessage for example.

Many people are uneasy about filling their homes -- and offices -- with devices containing always-on microphones, especially when it's not entirely clear what's happening with the data they collect. Apple has the advantage of a huge existing base of iPhone and iPad users, and the low cost of rival products may work in its favour as consumers may be more willing to abandon a $100 device they bought on a whim once their favoured vendor's offering is available.

Apple faces a tough battle to break into a market with established companies offering cheaper products. But if it can convince enough people that it can do a better job of protecting privacy than its rivals, then it could still capture the premium and privacy-conscious segment of the smart home market. Apple may be late to the game, but it still has a shot or two in its locker.



Previously on Monday Morning Opener: