Smart speaker wars heat up as Apple reportedly prepares to show off its Siri-controlled speaker.
SAN FRANCISCO — OK Google. Listen up, Alexa. Siri may soon have a say in the future of smart speakers.
Amazon’s sleeper hit Echo and its challenger Google Home have claimed spots on countertops and nightstands across America. More and more people can’t stop talking to these voice-activated, artificially intelligent devices. And that poses a competitive threat to Apple. Without a speaker device of its own, the iPhone maker could see its relationship with loyal users begin to fray.
Apple is expected to unveil a Siri-controlled speaker, and it could take the wraps off as soon as Monday when the company kicks off its Worldwide Developers Conference in San Jose. Even though it’s late to the smart-speaker craze, Apple’s beloved brand and considerable fan base could help it grab a sizable chunk of the growing market, analysts say.
Just ask consumers like Mike Julianelle, who’s already ready to trade in his Amazon Echo for one.
The 40-year-old blogger from Brooklyn says he got the Echo as a gift from his wife a year ago and uses it to check the weather or to ask random questions. On weekend mornings, he plays the Beatles or the “Hamilton” soundtrack for his six-year-old.
But Julianelle says his is an Apple family with a big collection of iPhones, iPads and iPods. Most of his music library is on iTunes. The Echo and Google Home mostly don’t support services from Apple, and that’s frustrating, he says.
He believes an Apple smart speaker, with high-end sound quality and easy integration with other Apple devices and services such as Apple Music, will develop an instant following with people like him.
“People love Amazon, sure, but mostly for what it does, not what it is. I know people who will pounce on anything Apple puts out, ” said Julianelle, who blogs at DadAndBuried.com . “They’re totally in the tank for the brand in a way few other tech brands can manage.”
Analysts say voice is the biggest shift in how we interact with devices since the smartphone. People are flocking to these voice-controlled speakers that play music, fetch the news, read an audio book, make a shopping list and answer homework questions. This year, 35.6 million Americans will use a voice-activated assistant device at least once a month, according to research firm eMarketer. And that’s heating up the rivalry among the tech giants competing to get inside people’s homes.
“The hidden driver of the demand is that people understand that conversations could simplify their lives and they are desperate for something that solves everyday problems with a conversational interface, ” said Forrester Research analyst James McQuivey.
According to Bloomberg News, Apple’s upcoming Siri-controlled speaker will provide a hub to control devices such as lights, door locks and window blinds with Apple’s HomeKit system. It’s also Apple’s bid to keep consumers from straying to other services, such as music offerings from Amazon Prime Music or Google Play. Apple declined to comment.
The stakes are high for Apple. Its years of iPhone-powered growth are waning: Last year it produced a string of quarterly sales drops as consumers held off buying new iPhones in huge markets like China. Its Apple services, powered by subscription payments for cloud storage and music, has picked up much of the slack. CEO Tim Cook expects service revenue to double by 2020 from last year’s $24 billion.
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Gene Munster, managing partner at Loup Ventures, estimates that 10 million Echo and Google Home units have shipped so far. In order to be considered mainstream, they’d have to ship on the order of 500 million units, he said.
Apple is late, he says, “but the needle really hasn’ t moved in this market.”
Still, it might not be that easy to separate even diehard Apple users from their Amazon Echo or Google Home.
Margaret Mariani, a 36-year-old consumer insights consultant from Tampa, Fla., says she owns an iPhone, iPads, a MacBook Air and two Apple TVs. But she’s sticking with Alexa.
“I don’t think Siri has a chance of stealing me away, ” said Mariani, who has had the Amazon Echo for about three years.
She’s interested in how Apple’s speaker will be different from the Echo and how much it will cost. But bottom line, she says, Alexa is her best friend who keeps her company in her home office and entertains her family.
“She’s like my fifth family member, ” Mariani said.
Familiar playbook
Coming late to a market hasn’t stopped Apple. Apple’s iPod dominated even though portable MP3 players had been around for a while. BlackBerrys, Palm Treos and Windows Mobile devices were popular handsets before the iPhone upended the market, becoming the world’s most popular smartphone. And even though Samsung and others beat Apple to smart watches, the Apple Watch is by far the most successful, taking nearly 80% of smartwatch revenue in the fourth quarter of 2016, according to research firm Canalys.
The popularity of the new Apple speaker may be aided by third parties building products and services for it. Last year Apple opened up Siri on the iPhone to companies like Uber, PayPal and Facebook so people could hail rides, send money or post a status update with voice commands. Apple will undoubtedly make it easy to order milk and toilet paper, make restaurant reservations or catch up on the latest celebrity news on its home speaker.
“At the most basic level they have to make it easier for you to interact with Apple products with your voice, and that’s the idea with Siri and the speaker, ” Munster said. “As they do that, it gives them opportunities to sell services… Developers are going to get more sophisticated building apps around voice that you’ ll pay for, and Apple will take a cut of that.”
Apple got into voice assistants earlier than most. In 2010, it bought the company that made Siri and built the digital assistant into the iPhone 4S in 2011, a year ahead of Google Now, which later morphed into Google Assistant. Microsoft didn’t launch Cortana, and Amazon didn’t introduce Alexa, until 2014 and 2015, respectively. As a result, Siri is the most widely available digital assistant. But it’s battling the perception that it lags the Google Assistant and Alexa.
“Putting the speaker on (a device) and an active mic is pretty easy to do, ” Munster says. “But closing the gap about the quality of the answers (an assistant delivers) is difficult. Apple can do it, but it’s an uphill road compared to Google.”
Apple has developed a Siri-everywhere strategy, not just on the iPhone, but on iPads, Macs, Apple TV, AirPods, the Apple Watch and in vehicles through CarPlay. The home speaker is the latest frontier.
