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After months of rumors, Apple finally introduced a wireless streaming speaker called HomePod this week, their first new hardware product since the Apple Watch debuted in 2015.  The Siri-enabled wireless speaker also doubles as a HomeKit powered smart home hub, giving Apple a new fixed HomeKit control point beyond Apple TV. The HomePod will ship in December and is priced at $349.

There is a bunch to break down here, including the HomePod compares to Amazon’s Echo, but let’s first look at what exactly Apple introduced.

The Hardware

The new HomePod is an impressive piece of hardware. The HomePod includes Apple’s A8 chip, a system-on-chip CPU/GPU that debuted in 2014 with the iPhone 6. It has a six-microphone array with advanced echo cancellation, which Apple says will enable “Siri to understand people whether they are near the device or standing across the room, even while loud music is playing.”  The Siri-powered speaker also features seven beam-forming tweeters, each with an amplifier, and it also includes what Apple calls room-sensing technology that allows the device to optimize its sound based on the specific spatial characteristics of where music is being played.

During the event, Apple made a string of other important announcements that led up to the climactic debut of the HomePod:

AirPlay2

One of the most important foundational technology upgrades announced Monday was AirPlay 2, a much-needed update to Apple’s wireless streaming protocol. With Airplay 2 we finally get multiroom audio support, a huge upgrade that will allow homes with Apple’s HomePod – as well as products from partners like Bose, Bang & Olufsen, Marantz and others – to stream audio wirelessly to different rooms and to multiple speakers. The upgrade puts Apple’s streaming music framework on par with Google’s Chromecast for audio, which already supports multiroom audio.

A notable absence from the list of initial partners was Sonos, a company that almost single-handedly created the wireless multiroom audio category.

HomeKit

The release of AirPlay 2 will not only bring multiroom audio support, but it also adds speakers to the list of devices controllable with Apple’s smart home protocol, HomeKit. By adding the speaker category to HomeKit, consumers will be able to control their wireless speakers through the iOS Home app.

The arrival of the HomePod also brings a second fixed smart home hub device into the lineup. Like Apple TV, the HomePod allows for remote access to any HomeKit compatible device through the Home app. However, with far-field listening capabilities and integrated Siri, the HomePod instantly surpasses Apple TV to become Apple’s most capable smart home hub.

What Does All This Mean?

The pricing, capabilities, industrial design and messaging gave us all we need to know to break down Apple’s strategy:

The HomePod Is, Above All, A Music Product: The HomePod is built to be a great wireless streaming speaker. With seven beam-forming tweeters – that’s one more sound driver than the Sonos Play 5 – it’s built to sound great. Sure, the HomePod has built-in Siri, but Apple messaged this as a revolutionary multi-room speaker first and a virtual assistant second.

This Is a Premium Product : The price of the HomePod, $349, may seem fairly affordable when compared to other Apple products, but at roughly double the price of the Amazon Echo and nearly triple that of Google Home, this is a much higher priced than other smart speakers.  It’s clear Apple has Sonos, probably moreso than Amazon or Google, in its crosshairs.

Apple Is Finally Bringing An Upgraded Siri Home: One of the messages from Apple this week is Siri has finally grown up. By adding anticipatory computer features, opening it up further to developers with a year two SiriKit and creating a Siri face for Apple Watch, the company finally feels they have a virtual assistant on par with Google Assistant. And now with HomePod, Apple has a true voice assistant to bring into the home.

Apple Vs. Amazon

Where does this position Apple relative to Amazon and the Echo?

I think given the premium pricing strategy, Apple appears to be ceding the fixed smart speaker mass market to Amazon. By choosing a music-first, premium approach, Apple appears content to let Amazon win the numbers battle with its lower-cost smart speaker.

However, letting Amazon blanket the mass market with $49 Echo Dots does not mean Apple is ceding the virtual assistant market to Amazon. In fact, if we learned anything this week it’s that Apple plans to leverage the hundreds of millions of Siri-powered iPhones, iPads and Apple Watchs in the market as it does battle with Alexa. .

And not only is Apple leading with iOS, but they plan to make it a much more rich and robust platform with new efforts like ARkit, their new augmented reality developer platform. Imagine pairing a well-done augmented reality app with a voice assistant capability in the home, and you might have something pretty cool.

Ok, so while it’s a bit of a risky strategy, it’s probably the right one for Apple. By ‘dancing with one who brought them’ in iOS and augmenting their home strategy with a premium-priced smart speaker/virtual assistant for the home with HomePod, Apple now at least has a strategy to do battle with Echo, even if their new smart speaker is priced out of reach for some consumers.

Lastly, let’s not forget that the HomePod with HomeKit is a true smart home hub, with all the built-in intelligence to make a powerful Apple-powered smart home come to life. While the Amazon Echo has done an good job integrating with hundreds of various smart home devices through its skill platform, it’s limited in its ability to execute on things such as scenes. With HomeKit and a new rev of the Home app for iOS, I think Apple may finally have what it needs with the HomeKit-HomePod combo to deliver on the early promise that had so many excited about HomeKit.

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