Apple's HomePod might be in trouble. We're not talking about its design, or even its delays—annoying and expected as they might be for a typical Apple entry into a new product category. There's the simple fact that Amazon, at this moment, is a smart-home juggernaut, and that's going to make Apple's first steps into the smart speaker space that much trickier.
At least, that's the argument being put forth by M.G. Siegler, general partner at GV, who wrote a Medium post Thursday highlighting a telling statistic from a recent article from The Economist: Amazon has sold 75 percent of the world's smart speakers and is now the largest speaker brand worldwide. Additionally, Amazon's Echo Dot was its top-selling device for holiday shopping and the Fire TV stick, with its Alexa smart assistant built-in, took second place. That's a lot of Alexa in a lot of hands, and that's a huge milestone for Amazon, Siegler says.
"I've been thinking about this recently not just in the context of putting Echoes in hotels, but also relative to Apple. As we're all well aware, Apple had to delay their foray into the space, the HomePod, into 2018. But not only did they miss the all-important holiday shopping season, I'm increasingly thinking that they may have missed the boat," he writes.
"Believe me, I know how dangerous this line of thinking is with regard to Apple. Apple is almost never the first-mover in a market. Instead, they prefer to sit back and let markets mature enough to then swoop in with their effort, which more often than not is the best effort (this is both subjective in terms of my own taste, and often objective in terms of sales). But again, I increasingly don't believe that this will be the case with their smart speaker."
According to Siegler, Amazon's advantage comes from its attempts to get Alexa in as many hands as it possibly can. When it's selling an Echo Dot for $29, that's low enough to make shoppers much more interested in giving the smart device a try—not so much for a smart speaker that costs hundreds of dollars.
"As 2017 comes to a close, I still wouldn't want a one-room-only AI assistant. But now that Echo speakers start at only $50 — $30 on sale — I can easily accept having separate or linked AI assistants anchored all throughout my home," writes VentureBeat's Jeremy Horwitz, a huge Siri fan who has since accepted Alexa into his tech lifestyle.
"Amazon anticipated this last year by offering Echo Dots in discounted 6- and 12-packs; it more recently offered discounts on 3-Dot and 6-Dot bundles. The latter deal offered six (or seven) rooms of Alexa coverage for less than a single Apple HomePod, which still doesn't have a launch date."
Though Apple is notorious for waiting for the right moment to jump into a product category, attacking with innovations and high profit margins, the story might turn out a little differently for the HomePod.
"All I know is that I love Amazon's Alexa strategy right now. And I think Apple is in for a rude awakening with the HomePod if they wish to ever compete in this space — which they obviously do. Apple doesn't mind being late to the game. In fact, they prefer it. But it feels like the game has changed ahead of their entry, for once," Siegler writes.