Appendix - Apple: Better With AR Than With AI - AUG 2017

BMI View: The HomePod marks Apple's entry into the smart speaker and virtual assistant market, as it could not give too much ground to Amazon and Google. Its price makes it a premium product, but does not hide that Apple is lagging behind when it comes to AI, hence its ambition to become a key player when it comes to AR.

As part of its WorldWide Developer Conference (WWDC), Apple has announced a series of new products, including improvements in its Mac and iPad range. We believe the key developments are the launch of the HomePod, its smart speaker, and the arrival of Augmented Reality (AR) capabilities as part of the next iteration of iOS, iOS 11. The company is still looking to lessen its dependency on the iPhone, but the incredible success of the product, with over 1bn in unit sales and almost USD1trn in revenues, means that not matching up will not necessarily equate with failure for new offerings (see ' Apple: Still Strong, But Should Not Get Complacent ' , May 11 2017).

The HomePod is Apple's first new hardware since the launch of the Watch in 2015, and the second under Tim Cook's leadership. Apple is not a precursor in the smart speaker market, as both Amazon and Google have already launched their own products. Apple is catching up, and as with the iPhone, is positioning the HomePod as a premium product, with a price of USD349 that is far higher than its rivals'. The HomePod is seen as a sound speaker more than anything else, as Apple highlights the sound quality as a key reason for the higher price. Unlike other speakers, the smart home or virtual assistant elements are almost secondary, and we believe this shows Apple's weakness when it comes to artificial intelligence (AI).

HomePod A Premium Product
Price (USD)
Source: BMI, Amazon, Apple, Google

This article is part of our Middle East & Africa coverage. To access this article subscribe now or sign up for free trial