The Transport Guy: The HomePod seems great, but Apple missed a much bigger opportunity (AAPL)

Steve Kovach January 23, 2018 at 09:26AM

Apple HomePod

Apple's HomePod speaker goes on sale February 9.
It'll be a great device, but it's much more limited than competing products from Amazon and Google.
Apple missed an opportunity to be a major player in voice computing hardware, a growing and popular category now dominated by Amazon.

After about a two-month delay, Apple's HomePod smart speaker will go on sale February 9.

It seems like a great device, especially when it comes to sound quality. I heard one during a demo last year and it sounded a lot better than competing devices like the Amazon Echo and Sonos Play 3.

But the $350 HomePod will only be a great device for a much smaller addressable market than the competition. Apple has missed its opportunity to break into voice computing hardware, a popular and growing gadget category now dominated by Amazon and Google.

Like I said after CES earlier this month, Amazon and Google now have the lead in voice, and that lead is only going to widen over time as Apple continues to maintain a closed ecosystem.

To recap:

HomePod is primarily a music accessory, and its voice controls only work with Apple Music: Like the rest of Apple's products, the HomePod is locked into the company's own services, meaning you can't use the speaker to its full potential unless you're an Apple Music subscriber. Spotify, Pandora, Amazon, Google Play, and the rest will technically work with HomePod, but you'll have to beam the music to the speaker from your iPhone using AirPlay, which isn't as good or as natural as using voice controls. There are 30 million Apple Music subscribers, and I doubt many or even most of them will want to drop $350 on a HomePod when there are cheaper and more capable alternatives.
Echo and Google Home are more affordable: You can buy an Echo Dot or Google Home Mini for as little as $30. At that price, it's easy to put a speaker in every room for voice controls. Most people will only be able to afford one HomePod for now, and its form factor doesn't make sense outside the living room. I doubt many people are going to put a HomePod in the kitchen or bedroom, for example. And, given Apple's focus on high-end sound quality, I'd be shocked if Apple ever released some sort of cheaper "HomePod Mini" any time soon.
Alexa and Google Assistant are more open: Voice control needs to work with everything and be everywhere in order to be successful. All the popular stuff you use — streaming music services, smart home gadgets, and everything in between — should be able to tie into the voice assistant. That's possible with Alexa and Google Assistant, but Siri is locked down to just a few categories like Apple Music, messaging, and to-do lists.
Amazon owns the voice-controlled smart home: Even though Apple has its own solution for smart home gadgets controlled from the iPhone, Amazon and Google have a massive lead in voice control beyond the smartphone. According Consumer Intelligence Research Partners, Amazon had 20 million smart speakers in the US as of November 2017. Google had 7 million. Those numbers are likely a lot higher after the 2017 holiday season, which Apple missed when it delayed the HomePod. Alexa and Google Assistant's popularity and huge lead will only drive more device makers to choose those platforms over HomePod.
Siri is used differently. Apple said on Tuesday that Siri is "actively used" on 500 million devices. But all of those devices have screens, meaning voice isn't their primary input. After a big head start with Siri, Apple let its lead slip. Now Amazon and Google have created new, rapidly growing ecosystems around voice-first controls powered by their respective assistants. Siri will be great for controlling Apple Music on the HomePod, but not much else.

The HomePod can and will get better and more capable over time, just like the Echo has. And I'm confident it'll be a great accessory for Apple Music subscribers who only want music without any extras.

But Apple missed a huge opportunity to lead in voice computing, and the HomePod only feels like a partial answer. This is the one area that I don't think Apple has the capability to swoop in and reinvent the category like it did with MP3 players, smartphones, and tablets.

Join the conversation about this story »

NOW WATCH: These inventions will help save the earth

The HomePod seems great, but Apple missed a much bigger opportunity (AAPL) from Business Insider: Steve Kovach