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Add the HomePod to Apple Inc.’s List of “Meh” Consumer Tech

It's a respectable digital assistant, but not the category killer some were expecting

By James Brumley, InvestorPlace Feature Writer

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If Apple Inc. (NASDAQ:AAPL) is looking for its next killer product (assuming the iPhone won’t be its champion for years to come), the HomePod isn’t it. The initial reviews are in, and most fans aren’t in love with it … and certainly not to the extent they’re in love with their iPhones.

In the grand scheme of things, it doesn’t matter. Apple’s future as well as the future of Apple stock is almost entirely about the iPhone, and it’s not likely that even Apple expected big things from its entry into the smart-speaker race.

Still, the lackluster view of the music-playing digital assistant is a surprising letdown from a company that usually impresses consumers.

Lukewarm Reception for the Homepod

Though Apple CEO Tim Cook isn’t a fan of the comparison, there’s no way of getting around it — the HomePod is the answer to the Alexa-powered Echo, from Amazon.com, Inc. (NASDAQ:AMZN). Alphabet Inc (NASDAQ:GOOGL, NASDAQ:GOOG) is at the dance too, with its Google Home device. And yes, Siri is the artificial intelligence entity owners are talking with when they’re looking to play some music, manage their connected appliances and set up a reminder for a future event.

On the surface it looks and acts identically to its rivals. And yet, users have noted subtle but significant shortcomings.

One of those shortcomings is a lack of an actual app to manage the device. It’s not entirely clear what it can and can’t do, and unlike the Echo, there’s no way of interfacing with the HomePod to customize how it functions.

Another surprising letdown; it doesn’t integrate all that well with music services such as Spotify or Pandora Media Inc (NYSE:P), while making it super-easy to use Apple’s audio services. That’s not to say it can’t be used with Pandora or Spotify. But, it takes some rigging up, and the HomePod won’t respond to all voice-based commands to manage your Spotify or Pandora experiences.

There’s also no built-in Bluetooth, so you won’t be able to send your tunes from the HomePod to another speaker.

Moreover (and this is by design), the HomePod is designed around the assumption that owners are already waist-deep into the Apple ecosystem.

It’s not a bad bet on Apple’s part, to be fair. Considering it costs around twice as much as other comparable smart-speakers, most buyers are likely existing fans of the company’s products anyway, and are willing to spend a little more than they normally might as a means of extracting even more value out of their previous investments in Apple devices. Owners of Apple stock have to love that nuance. But, that way of thinking is also self-limiting, preventing the HomePod from becoming a means of bringing new users into the Apple ecosystem.

Inevitable Comparisons for Apple Stock

Perhaps most surprising is the fact that the HomePod can’t do the simplest of things like order pizza, hail an Uber or even make a phone call despite its easy connectivity to an iPhone.

Those missing skills and features seem minor at first, but they become glaring omissions when users who’ve utilized Google’s and Amazon’s assistants in the past find they suddenly no longer have that hands-free option. There’s a reason Amazon and Alphabet built those things into their smart speakers.

Cook also doesn’t care for the comparison to the Echo or Google Home, by the way, because it positions the HomePod as a response to competing devices. Cook prefers to lead rather than lag, and besides, the HomePod is supposed to mostly be about the quality of the music it offers … and it does shine brightly on that front, boasting seven tweeters and a fairly big sub-woofer.

Of course, though he can’t say as much, he may also not care for the comparison because — despite an extra three years to develop it before it had to commit to a form factor and functionality — the HomePod is largely being viewed as a disappointing device because it is being compared to the Echo and Google Home by consumers.

It’s a comparison Apple had to have seen coming though.

Bottom Line for Apple Stock

It’s not the end of the world for Apple, nor is it a reason in and of itself to dump your Apple stock if you own it. Slews of companies would love to deliver Apple’s kind of “mediocrity.”

It is a development that the true buy-and-hold AAPL stock owner might want to mentally bookmark, however, as it’s another so-so entry in a list of product launches that haven’t been nearly as successful as the iPhone has been.

Sure, Apple is winning the smartwatch race, but that’s race with a pretty small purse. iPads are hanging on, but sales are hardly hardy; the company has only sold about one-fourth of all tablets sold since 2014 despite the iPad arguably being the best tablet on the market. In the meantime, Apple has been lapped by Roku Inc (NASDAQ:ROKU) on the streaming set-top box front. Now, the company will be lucky if it manages to turn its late entry into the smart-speaker market into a respectable third-place finish.

Maybe Apple has lost some of its Steve Jobs magic.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.


Article printed from InvestorPlace Media, https://investorplace.com/2018/02/add-homepod-list-meh-consumer-tech-apple-inc/.

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