Apple Takes Another Swing at the Smart Speaker Market

on October 19, 2020

Apple kicked off its annual iPhone launch event this week by announcing the $99 HomePod mini. I’m excited to try the product, which utilizes several pieces of custom silicon, leverages the company’s strong position in categories such as smartphones and wearables, and once again emphasizes Apple’s research into delivering high-quality sound. All that said, while I’m sure a good number of consumers entrenched in the Apple ecosystem will buy the HomePod mini, I’m still not convinced the product will dramatically change Apple’s overall fortunes in the smart home market.

Impressive Tech
The HomePod mini is an impressive bit of tech, all wrapped up in a 3.3-inch tall, acoustically designed seamless mesh fabric that comes in space gray or white. It leverages Apple’s S5 chip, which first shipped in the Apple Watch Series 5, as the brains of the operation. That’s a notable change from the full-sized HomePod, which uses an A8 chip that first shipped in the iPhone 6. In addition to driving smart assistant functions, Apple says the S5 drives computational audio that adjusts dynamic range and the speaker hardware to optimize sound based on the content that is playing.

The HomePod mini also includes Apple’s U1 ultrawideband chip, which Apple started including in iPhones in 2019, and added to the Series 6 Apple Watch. When you bring a U1-enabled iPhone close to the HomePod mini, it sees the phone and offers up handoff opportunities. For example, if you are listening to music on your phone as you enter the room with the HomePod Mini, you can transfer the audio over to the smart speaker.

Perhaps the most compelling new feature is Intercom, which lets you leverage multiple HomePod speakers (including the original) to make house wide-announcements using a new feature called Intercom. Yes, competitors such as Amazon’s Echo already do this, but Apple’s special sauce is that in addition to its smart speakers, the message will also play out over all the iPhones, iPads, Apple Watches, and AirPods in the house, as well as through CarPlay.

Like the original HomePod, which sells for $299, the mini will offer multiroom audio, stereo pairing, and smart hub features. However, it does not support spatial awareness or home theater with Apple TV 4K like its bigger brother.

Apple’s Challenges
The new HomePod mini is a huge step in the right direction for Apple and should help it make inroads into the smart speaker category where its original, high-priced HomePod has languished. But as Ben noted earlier this week, the elephant in the room remains the issues with the “smarts” behind its smart speaker: Siri. As a smart assistant, it is still not very good. And while Apple can point to stats about how much better Siri is than before, the fact of the matter is that the company has a huge job ahead of it in convincing people who have had poor experiences with Siri to keep coming back and trying it again.

I test a great deal of hardware, and I have easy access to the smart assistants from Amazon, Google, and Apple. And in my personal life, I always use the first two before I turn to Siri. In fact, the only time I use Siri is on the Apple Watch, when I’m on the go. My experiences with Siri have been so frustrating that I took the extra step of installing Amazon’s $50 Echo Auto in my vehicle so I can access Alexa there instead of using the Siri on the iPhone sitting on my passenger seat.
And it is easy to fixate on Siri’s issues versus the smart assistants from Amazon and Google, but Apple’s challenges extend beyond that. In China, for example, companies such as Xiaomi, Alibaba, and Baidu all have voice assistants that my colleagues there say perform better than Siri. According to IDC’s Smart Home Tracker, China is the second-biggest smart speaker market behind the U.S.

Beyond the Siri issues, one of the other significant challenges Apple faces is the fact that many early adopters have already chosen their smart assistant. We have standardized on Echo (seven and counting) in my house, and our utilization has only gone up during the pandemic. It is mostly basic stuff, loads of timers, weather reports, music and podcasts, and occasional questions about store closing times or random facts. We also use Alexa to turn off lights, and we use it all the time to call other rooms or make household announcements (which now show up on our iPhones running the Alexa app).

And while the HomePod mini’s $99 price is way more attractive than the HomePod’s current $299, it is nowhere close to the Echo Dot’s list price of $50, and the fact that you can often buy the Dot for $30 or less. And that is a bit of an issue, as smart speakers really begin to show their value when you have more than one. Part of the reason we standardized on the Echo was the simple fact that it was affordable to put them throughout the house. I have no doubt that the HomePod mini will sound better than my current third-generation Dots, but in my house, sound quality is important only in a few rooms, and frankly only matters to me.

Finally, it is important to note that while Apple did say that the new HomePod Mini would support some third-party music services, it doesn’t include currently offer support for Spotify. For many, that will be a dealbreaker, and I hope it is a fix Apple can make soon after launch.

Still a Growing Market
While Apple certainly faces some serious challenges in the smart speaker market, the HomePod mini’s introduction puts it in a much better competitive position. And its ability to leverage the iPhone to drive interactive experiences with the speaker could be a difference-maker for many. If the company can better leverage its HomeKit capabilities to make its smart speaker a more capable home automation hub, that should resonate with many people, too. Finally, there are undoubtedly plenty of Apple customers who have waited on the smart home sidelines for the company to field something more competitive before jumping in.

In fact, while we’ve seen the smart speaker category expand at a very rapid pace in the last few years, we still plenty of growth in the coming years. According to IDC’s Smart Home Tracker, smart speaker volumes will grow at a double-digit pace next year, pushing toward 160M units worldwide. With the new HomePod mini, I expect Apple will grab a more significant share of that pie. To do so, however, the company must keep pushing. In addition to continued work on Siri and the inclusion of Spotify, one other thing I’d like to see Apple do is to iterate faster in hardware. It announced its original HomePod way back in 2017 (and launched it in early 2018). This market—and its competitors—are evolving too fast to wait years between product announcements.