Navigant Research Blog

Apple Finally Introduces HomePod to Rival Echo and Home Devices

Paige Leuschner — June 7, 2017

Rumors of an Apple-branded smart home speaker have finally come to fruition with the introduction of the HomePod on June 5. This speaker has been a long time coming; some reports indicate that the HomePod has been in development for the past 2 years. Navigant Research covered these details in a blog on competition in the smart home market in September 2016. But don’t get too excited yet—the speaker will not be available until December 2017 in the United States, United Kingdom, and Australia—and it will cost a whopping $349.

Part of the reason for this steep price is that Apple is attempting to differentiate this speaker from Amazon Echo and Google Home speakers with more advanced microphone and speaker technology. According to reports, when a HomePod is first activated, it sends out a 360-degree beam of sound and plays differently according to its environment (a bookshelf or wall nearby). Supposedly, it also automatically connects to other HomePod speakers nearby and the speakers will adjust their respective sound output to make sure they work well in tandem. Thus, the HomePod is considered a premium product because it is not only a powerful music player, but it also has smarts.

Apple-Enabled Smart Home

Perhaps one of the more important features, however, is that this speaker is embedded with Siri, which has been utilized on iPhones since late 2011. This has larger implications for an Apple-enabled smart home, as the HomePod speaker will now act as a hub for Apple’s HomeKit platform. HomeKit has integrations with a range of manufacturers, including Logitech, Lutron, Honeywell, and Leviton, among others.

Although this sounds like the perfect tipping off point for Apple, the company may struggle to gain traction in the smart home market compared to its competitors. Amazon Echo, which was introduced to the US market in 2014 and the UK market in late 2016, has been a surprise success among consumers. Amazon Echo sales were estimated at between 9 million and 11 million devices at the beginning of 2017. While Google only recently introduced the Home and is still gaining traction in the market, the capabilities of Google Assistant are reportedly some of the best available today (in terms of actually being able to perform functions with the speaker outside of simply playing music). Assistant utilizes other Google resources such as Gmail, Google Calendar, Google Maps, and its infamous search engine.

Interoperability Issues

Apple will also face challenges due to interoperability issues. The HomePod is part of a much more closed off ecosystem of devices and applications than those of Google and Amazon, which have had more time to integrate with third-party devices and are generally more open to playing with others. For example, while Apple is playing the “totally rocks the house” card with this speaker, Siri will only link to Apple Music. Spotify, Amazon Unlimited Music, Google Play Music, and YouTube customers will not be able to use Apple HomePod to play music. This could drive consumers to shift to Apple Music or it could make them frustrated and more likely to adopt other, more open solutions.

Though it remains to be seen how Apple will fare with its new speaker, this product release represents another major player becoming more involved in the smart home. The smart home is increasingly becoming a reality. With major stakeholders investing more in connected products and services, it’s only a matter of how the market develops and when it becomes fool-proof and mainstream.

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