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Siri Smart Speaker May Debut at WWDC 2017 (AAPL)

AAPL may finally challenge the Amazon Echo with its own smart speaker

By Brad Moon, InvestorPlace Contributor

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It’s been a long time coming, but predictions are beginning to line up that Apple Inc. (NASDAQ:AAPL) is finally preparing to release a smart speaker to take on Amazon.com, Inc.’s (NASDAQ:AMZN) Amazon Echo.

If the latest reports from noted Apple “leakers” Sonny Dickson and Ming-Chi Kuo pan out, we could see a Siri speaker unveiled at Apple’s annual Worldwide Developers Conference (WWDC) in June.

Bloomberg News started the whole Siri speaker ball rolling last September when it reported Apple’s response to the Amazon Echo had entered the prototype phase. Things went quiet for a few months, but last week Dickson — an established Australian Apple leaker — claimed to have insider information with more details.

Dickson said Apple’s smart speaker will steal some design cues from the cylindrical Mac Pro (although with a lot more speaker mesh), and it will incorporate Beats technology. This makes sense, since Apple owns Beats and it’s a leading brand in consumer audio technology. Dickson also claims the Siri speaker will support Apple’s AirPlay Wi-Fi standard and will run a variation of iOS (similar to the route AAPL took with watchOS and tvOS).

What’s not mentioned is a camera. Bloomberg had suggested the possibility of a facial recognition camera. Given the reaction to Amazon’s Echo Look smart speaker with integrated camera, AAPL may be better off leaving that feature out anyway.

According to Dickson, the new Apple smart speaker could be unveiled at WWDC next month.

Premium Sound + High-End Smarts = Premium Price Tag

Yesterday, KGI Securities analyst Ming-Chi Kuo waded into the fray with additional information about the Siri speaker.

AppleInsider has the details of Kuo’s report. He is expecting to see considerably higher specs than on the Amazon Echo. On the audio side, he says Apple will be including a woofer and seven tweeters; the Echo has a two-driver setup with one woofer and one tweeter. The CPU will be a custom version of one of Apple’s powerful AX series units, at least equal in power to the A8 from the iPhone 6, Kuo repored. It will support Apple Airplay for Wi-Fi streaming, but also offer Bluetooth connectivity using the W1 chip AAPL introduced with its AirPods.

Kuo sees “more than a 50 percent chance” the Siri speaker will be announced at the developers conference. Like the Amazon Echo, there’s also a good chance Apple will expand its smart speaker lineup from a single initial model, to offer other versions of the Siri speaker.

More importantly for AAPL stock investors, he’s predicting Apple Inc. could move more than 12 million Siri speakers in the first year of availability.

That’s actually a pretty aggressive number. It’s approximately the same volume as the Apple Watch moved last year (AAPL has not confirmed numbers but Apple Watch sales for 21016 are estimated at 11.9 million). And it’s a lot more smart speakers that Amazon sold its first year.

Prospects for Siri Speaker Success

The Amazon Echo has proven there is growing consumer demand for these devices.

The smart speaker pioneer sold a reported 11 million Echo devices in its first year and a half, then notched as many as 9 million more during the holidays. In response, Alphabet Inc (NASDAQ:GOOGL) launched its own Google Home smart speaker in 2016 and Microsoft Corporation (NASDAQ:MSFT) has been showing off third-party speakers with Cortana integration.

Apple Inc. releasing a Siri speaker into a growing market like this makes sense — especially when the tech titan has advantages like its own premium audio technology, its own custom Bluetooth chip, its own AirPlay Wi-Fi streaming platform, along with experience in customized device operating systems. Smart speakers have also morphed into platforms for controlling the smart home, another area where AAPL does not want to lose ground.

It’s not a question of if Apple will take on the Amazon Echo, but when the Siri speaker will arrive. And at this point, it looks like there’s a 50-50 chance or better chance the when will be June.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/05/apple-inc-siri-smart-speaker-may-debut-at-wwdc-2017-aapl/.

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