Apple Inc. is already in your pocket, on your desk and underneath your television. Soon, a device embossed with “Designed by Apple in California” may be on your nightstand or kitchen counter as well.
The iPhone-maker has started manufacturing a long-in-the-works Siri-controlled smart speaker, according to people familiar with the matter. Apple could debut the speaker as soon as its annual developer conference in June, but the device will not be ready to ship until later in the year, the people said.
The device will differ from Amazon.com Inc.’s Echo and Alphabet Inc.’s Google Home speakers by offering virtual surround sound technology and deep integration with Apple’s product lineup, said the people, who requested anonymity to discuss products that aren’t yet public.
Introducing a speaker would serve two main purposes: providing a hub to automate appliances and lights via Apple’s HomeKit system, and establishing a bulwark inside the home to lock customers more tightly into Apple’s network of services. That would help combat the competitive threat from Google’s and Amazon’s connected speakers: the Home and Echo mostly don’t support services from Apple. Without compatible hardware, users may be more likely to opt for the Echo or Home, and therefore use streaming music offerings such as Spotify, Amazon Prime Music or Google Play rather than Apple Music.
“This will be a platform for developing Apple’s services,” says Gene Munster, a co-founder of Loup Ventures and former Apple analyst.
Apple spokeswoman Trudy Muller declined to comment.
Chief Executive Officer Tim Cook has emphasized Apple’s services businesses over the past 18 months as iPhone sales slowed. He expects service revenue to double by 2020 from last year’s $24 billion. A speaker may help keep customers loyal to service products such as Apple Music, a subscription music streaming offering that costs $10 per month. The speaker would likely be tucked into Apple’s “Other Products” category, which currently includes devices like the Apple Watch, Apple TV and AirPods. That set of products generated $11 billion in sales last year.
Click here to read more.
SOURCE: Bloomberg, Mark Gurman and Alex Webb