APPLE

Apple’s HomePod could ignite huge Chinese market for smart connected devices

PUBLISHED : Tuesday, 06 June, 2017, 10:52am
UPDATED : Tuesday, 06 June, 2017, 10:51pm

Apple’s new HomePod, a wireless speaker and digital assistant for the home, could ignite a potentially huge market for smart connected devices on the mainland starting next year.

The introduction of the HomePod capped a major day of Apple announcements during the company’s annual worldwide developer conference in the US on Monday.

“Apple will likely be selling millions of these devices in China and around the world,” said Tim Bajarin, president at technology market research firm Creative Strategies in California’s Silicon Valley.

HomePod, priced at US$349 and available in white and gray, will be initially released this December in the US, Britain and Australia before rolling out to other geographic markets next year. It is powered by the same Apple A8 chip used in the latest iPhones.

Bajarin, who attended a demonstration of the product prior to Monday’s announcement, said the company needed to resolve “some technical issues” before the HomePod is mass produced for the global market.

Apple unveils ‘HomePod’ smart speaker, in bid to challenge Amazon and Google

“The HomePod is a powerful home speaker with superior audio capabilities than other high-end speakers now in the market, and has Siri voice control that connects to other devices [based on Apple’s HomeKit framework for home automation],” he said. “With artificial intelligence and machine-learning capability as part of its architecture, the HomePod will only get smarter over time.”

He pointed out, however, that the new Apple product will compete squarely against wireless home speaker systems from the likes of Bose and Sonos, and indirectly against the Amazon Echo and Google Home digital assistants.

Designed to work with an Apple Music subscription for access to more than 40 million songs, HomePod provides deep knowledge of personal music preferences and tastes, and helps users discover new music. Apple estimated that it currently had 27 million paying subscribers with Apple Music.

In his presentation on Monday, Philip Schiller, Apple’s senior vice-president of worldwide marketing, said HomePod is designed for voice control with an array of six microphones, so users can interact with it from across the room, even while loud music is playing.

Sales of smart connected speakers on the mainland are estimated to exceed half a million units this year, according to Counterpoint Research.

At least 150 million households...could potentially make up the total addressable market for smart speakers in the country
Neil Shah, a partner at Counterpoint

“The entry of more players integrating AI and a range of smart solutions into speakers next year could drive [mainland] sales to a couple of million units from next year before recording sales of more than 10 million units per year by 2022,” said Neil Shah, a partner at Counterpoint.

“Out of close to half a billion households in China, at least 150 million households — based on affluence and high annual income — could potentially make up the total addressable market for smart speakers in the country.”

Chinese e-commerce giant JD. com was an early player in the domestic market for smart speakers with its LingLong DingDong, a device launched last year by its joint venture with local speech-recognition software specialist iFlytek.

“We estimate there is a brewing domestic ecosystem [for smart connected speakers] which could leverage AI developments at Baidu, Alibaba and Tencent,” Shah said.

He added that foreign-brand smart home speaker systems could be subjected to increased government scrutiny and regulatory hurdles to protect personal data of mainland consumers.

Forrester Research analyst Julie Ask said the HomePod’s advantage is that security and privacy is fundamental to the product’s design. “It provides encrypted communications,” Ask said.