Apple is rumored to be releasing a smaller, cheaper version of the HomePod smart speaker and it could be a more important product for Apple than the iPhone 12. Here’s why.
Apple is set to announce the iPhone 12 during its Oct.13 digital event. Given the event’s „Hi, Speed.“ tagline and abundance of rumors, everyone expects a 5G iPhone. While Apple’s first 5G phone will certainly be the star of the show, I’m much more interested in one of the other possible announcements, an updated HomePod and a rumored $99 HomePod ‚Mini‘. Why? Because our phones may be the gateway to us as individuals, but voice-enabled smart devices (like the HomePod) and the data-driven networks behind them are the gateway to our homes. Don’t get me wrong, I’m not saying the HomePod will make up more of Apple’s revenue than the iPhone any time soon. According to AAPL’s fiscal Q3 2020 Consolidated Financial Statements, the iPhone accounts for 4 times the revenue of the entire wearables, home and accessories category (of which the HomePod is no doubt a part): Yet, the proliferation of smart devices and the internet of things (IoT) will transform our world as much, if not more than the smartphone. First, the market for smart and IoT devices, already rivals the phone market in shear size. According to GSMA’s „The Mobile Economy 2020“ report, the were 5.2 billion smartphone connections in 2019. According to the same report, there were 12.0 billion total IoT connections the same year…over twice as many. The smart speaker market is still a small part of the overall IoT market, but it is growing. In 2019, Forrester reported that 41 million US homes have smart speakers. Canalys forecasted that the number of smart speakers worldwide would grow from 114 million in 2018 to 200 million by the end of 2019 and could overtake tablet use by 2021. A report from Strategy Analytics showed that annual shipments of smart speakers grew by 70% in 2019 to hit a record high of 147 million units. And while the global economic slow down from the COVID-19 pandemic has slowed the growth of the smart speaker market, ResearchAndMarkets.com still predicts that the market will reach $11 billion in 2023. According to the 2020 NPR Smart Audio Report, about 60 million Americans 18+ own a smart speaker, up from about 53 million in 2019. NPR also found that the number of smart speakers in a given home is increasing. In 2019, they found that 21% of respondents reported owning three or more smart speakers. That number rose to 29% in 2020. Second, the value of smart speakers to Apple, isn’t really in selling you another $100 or $200 device. The HomePod’s true value is its ability to let buyers interact with more Apple services through voice. And as voice increasingly becomes one of THE primary interface methods between humans and our devices, companies that master speech recognition technology will have a competitive advantage. Even though we’re still in the early stages of voice adoptions, the trends are clear. Despite the privacy concerns associated with speech recognition technology, voice recognition use is on the rise.
