Apple debuted a scaled-down version of the HomePod smart speaker called the HomePod mini at its new product showcase on Tuesday. The $99 HomePod mini, half the price of the standard HomePod, gives Apple a competitor in the entry-level smart speaker space, as well as new features clearly aimed at helping Apple compete with the Echo and Nest line of smart speakers and displays produced by Amazon and Google, respectively.
The competition with Amazon appears baked right into the shape of the HomePod mini. Though likely a coincidence, the mesh fabric-covered sphere shape and display on top of the HomePod mini makes it look exactly like a shrunken, upside-down version of the new Echo Dot smart speaker Amazon unveiled a few weeks ago. The sphere comes in either black or white and the display offers volume control, lighting up when Siri is in use. The smart speaker comes with Apple’s usual high-end hardware, including an S5 chip capable of adjusting music to sound better 180 times every second according to the presentation. The premium hardware and audio software belie the fact that Apple is extending its inventory to less expensive products.
“The $99 price point for Apple HomePod Mini is actually a significant move by Apple,” Voicebot founder Bret Kinsella explained. “It risks undermining the company’s premium brand positioning and focus on extracting margin out of every hardware sale. With that said, it shows Apple is serious about the space and recognizes that its HomePod strategy and stubborn adherence to premium positioning was a mistake. There was not even a mention of HomePod at the event. ”
“It’s a meaningful step forward for Apple in the smart speaker market with a $99 price point,” Loup Ventures general partner Gene Munster told Voicebot in an interview. “Our expectation is Homepods U.S. market share will increase from 5% today to 10% over the next few years.”
The HomePod minis also network with each other, playing in sync and automatically creating stereo pairs if they are placed in the same room. Thanks to a new Intercom feature, customers with more than one HomePod or HomePod mini placed in different rooms can communicate with each other, much like the similar features in Echo and Nest devices. The messaging extends to connected Apple smartphones and watches. Siri gets a new “What’s My Update” feature to go with the new device. When asked that question, the voice assistant will pull together local weather, personal calendar data, reminders, and other details to report to the questioner. Considering the popularity of iPhones, that’s no small cache of data.
“I see Intercom as a part of Apple’s Voice First platform as they move to SiriOS,” voice tech expert Brian Roemmele told Voicebot in an interview. “Intercom is part of a new way to interact with Siri. Speech to text and text to speech to all Apple devices among a close-knit social network. I also see “Siri what’s my update” to be very powerful as Apple is holding far more context than Amazon or Google for an iPhone user. The $99 price point is perfect for this device and it will become an Apple top 10 selling device.”
The deeper connection among Apple devices extends to music and other audio as well, since the HomePod mini has the same Handoff technology Apple rolled out for the iPhone last year. As for the music they will play, Apple said there will be more third-party music services available directly from the smart speaker, including Amazon Music, iHeartRadio, and Pandora. Conspicuous in its absence on the list was Spotify, however. That may be because Apple views Spotify as a competitor in the space, or maybe a consequence of ongoing regulatory arguments between the two companies, but it shows how Apple defining who can play in its smart speaker garden. An entry-level Apple smart speaker could draw in new customers who would rather buy from Apple, just not when they are four times the price of one from Amazon or Google. As Apple’s slice of the smart speaker market is well below its rivals, big changes may be worth the risk. The question is, will Apple’s effort actually move the needle in the market?
“This move with Mini will be too little too late. The consumer draw of smart speakers is past its peak,” Kinsella said. “There are very good smart speaker options that have many more features and far more smart home options that also work well with iPhones.”