And what that might mean for Apple’s HomePod
“Having sold 75% of all smartspeakers, Amazon is now the world’s biggest speaker brand.”
At first glance,
this is sort of shocking. But then, when you pause to actually think
about it, it’s not. How often do you buy speakers? Maybe once a decade?
Maybe if you move and/or redo your home entertainment setup? Amazon (and
to a lesser extent, Google, Microsoft, and soon Apple) have given us
all a reason to buy speakers again. And not just one — a number of them,
to put all over our homes, offices, etc.¹
Anyway, that was the jumping off point for a post, then Amazon put out their annual press release this week touting their holiday sales numbers. While Amazon famously (infamously?) doesn’t give absolute numbers,
there’s no denying that even the relative numbers must be impressive.
And the most impressive of these numbers are all about Alexa.
The
Echo Dot was the number one selling device across all of Amazon during
the holiday shopping season. (The Fire TV stick with the Alexa-enabled
remote was the second-most popular product.) Again, no absolute sales
numbers beyond “tens of millions of Alexa-enabled devices” — more than we usually get, by the way — but no matter: tens of millions is impressive enough.
I’ve
been thinking about this recently not just in the context of putting
Echoes in hotels, but also relative to Apple. As we’re all well aware,
Apple had to delay
their foray into the space, the HomePod, into 2018. But not only did
they miss the all-important holiday shopping season, I’m increasingly
thinking that they may have missed the boat.
Believe
me, I know how dangerous this line of thinking is with regard to Apple.
Apple is almost never the first-mover in a market. Instead, they prefer
to sit back and let markets mature enough to then swoop in with their
effort, which more often than not is the best effort (this is both
subjective in terms of my own taste, and often objective in terms of
sales). But again, I increasingly don’t believe that this will be the case with their smart speaker.
Look, I think Apple positioning the HomePod around music is smart
— at least at first. Such a device strengthens and expands the Apple
Music ecosystem, while giving Apple an avenue to focus on what they do
best: creating high-end hardware sold at a premium.
But
I think Amazon — and to a lesser extent Google — has not only
established a market ahead of Apple’s entry, but has done so in such a
way that will make the HomePod sound a bit out of touch upon launch.
Again,
I know this is a risky prediction to make. But per above, I also know
that Amazon is the number one seller of speakers in the world right now.
And they’re doing this not by focusing on quality, as Apple will, but
by focusing on making their digital assistant, Alexa, ubiquitous.
But,
but, but. Android versus iPhone, you may counter with. Yes, Android is
more the volume play while iPhone is more the profit play. Maybe such a
dynamic will play out here as well.
Maybe. But the issue I see here is one of strength in numbers. That is, Amazon is winning this battle because they’re putting Alexa everywhere. Some of this is thanks to third-parties, but a larger part is the strategy to sell devices such as the Echo Dot for $29. At such prices, it’s not only a no-brainer to get one to at least try out — it’s a no-brainer to get a few of them to place all around your house. If this is the winning strategy — which I believe it to be — Apple cannot compete with this because it’s not in Apple’s DNA to run this type of playbook.
You’re not going to do that with the $349 HomePod. You might get one. Might. Die-hards might get two (probably to use in concert). Might.
This
is where Apple folks — again, I’m one of them! — will again jump in and
suggest that Apple’s strategy is different here. I agree! I just think
it’s the wrong strategy.
One
expensive speaker, no matter how nice, is not going to be able to
compete with what Amazon is doing. Maybe Apple isn’t trying to compete
with what Amazon is doing — after all, Siri on the HomePod will be
extremely limited to start. Maybe — but then this is also a mistake.²
Just as it was a mistake not to transform the Apple TV into Apple’s Echo device with an always-on Siri.
Perhaps
Apple is thinking one “home hub” for Siri in the HomePod and then a
handful of other end points in iPhones, iPads, and Apple Watches is how
you combat the ‘Alexa Everywhere’ strategy. They’ve more or less said
that the best assistant is the one you always have on you. This is true
some of the time, but in building out this new voice-enabled world, it’s blinding them.
Which
is surprising in that they must see their own app download charts in
the App Store during the holidays. The number one app — overall
— over the holidays was Amazon’s Alexa app. That can mean only one
thing: Amazon is selling a shit ton of Alexa-enabled devices this
holiday season. Apple doesn’t need a press release to tell them that,
they have the data. The fact that it’s a pretty shitty app only
reinforces the point: something is happening here.³
If
Apple chooses to overlook that data point, perhaps they should just
peruse a few more spots down the list to find the Google Home app, which
sits just outside the top 5. Again, overall. Why? Undoubtedly Google’s $29 Home Mini.
Look, we can argue the merits of quality speakers versus cheap ones. One would hope that at $349, the HomePod is going to be a far
better speaker than say, an Echo Dot.⁴ But my argument is that this
ultimately won’t matter. Right now, speakers are directly linked to
music. In the future of ‘Alexa Everywhere’, music will be but one facet of what speakers are for — an important use case, no doubt, but hardly the only one.⁵
All
of this begs the question of what Amazon does to get Alexa truly
everywhere… They’re clearly doing great in the home, with people buying
up Echoes to put in various rooms. And I’m sure the hotel thing will
happen. And cars are seemingly in the works as well.⁶ But what about making Alexa the only digital assistant you need no matter where you are?
This
would seem to be a strength Apple (and to an extent, Google) has with
their smartphones (and other devices — in fact, if Apple has a true
wildcard play here, it may be the AirPods). So Amazon will eventually need a strategy for this as well. Presumably, it won’t be the Fire Phone 2,
though who knows! Maybe instead it’s some tiny Alexa-enabled device you
can put on a keychain or something like that. An Echo Puck? An Echo
Ring? We’ll see.
All
I know is that I love Amazon’s Alexa strategy right now. And I think
Apple is in for a rude awakening with the HomePod if they wish to ever
compete in this space — which they obviously do. Apple doesn’t mind
being late to the game. In fact, they prefer it. But it feels like the
game has changed ahead of their entry, for once.
¹ Yes, I still realize many folks find this creepy, but that’s a different debate. As the stat above makes clear, this is happening.
² For the record, I’m sure
Apple’s plan is/was to expand Siri into a more Alexa-like home use-case
over time with the HomePod. They’re just starting slowly, in a very
Apple-like way.
³ Have you used the app? It’s awful. (And don’t get me started on their icon.) It feels like it was designed by a digital assistant. Doesn’t matter.
⁴ Though, interestingly, Google is seemingly taking both approaches in launching the $29 Home Mini and the $399 Home Max — more expensive than the HomePod!
⁵
As an aside, it would be fascinating to know just how fast Amazon’s
music service is growing in terms of usage as a result of Alexa. My bet
would be very fast. Certainly that’s the case in our household.
⁶ Some are already “hacking” this by taking the battery-powered Tap with them everywhere they go.
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