A Reuters report posted today is trying to put a positive spin on Amazon and Google selling their respective digital assistant speakers at a financial loss. They quote senior IHS Markit analyst Paul Erickson stating that this “kind of pricing is great for consumers and bad for Apple.” They also quote senior research analyst at IDC Adam Wright saying “Apple is in a bit of trouble, as we’ve witnessed an explosion [of smart speakers] in the last six months.”
While Google and Amazon are attracting Android fans to these cheap devices, I don’t see the connection to it hurting Apple or threatening Apple. Apple is primarily aiming their upcoming HomePod at Apple Music fans and not the general public.
Apple’s marketing is clear: “HomePod is a powerful speaker that sounds amazing, adapts to wherever it’s playing, and together with Apple Music, gives you instant access to one of the world’s largest music catalogs. And with the intelligence of Siri, you control it through natural voice interaction.”
Apple’s HomePod with Siri wasn’t designed to play trivial pursuit and that was made abundantly clear by Greg Joswiak, Apple’s VP of product marketing. So this notion that Apple is “in a bit of trouble” because rival Android players are madly slashing their smart speaker prices is off-the-wall spin.
Comparing tiny cheap puck speakers to Apple’s quality smart speaker to begin with is ludicrous. Mind you, they likely did well as mindless cheap stocking stuffers for last minute shoppers.
At the end of the day the Reuters report takes a truly negative market story about two Silicon Valley giants losing money hand over fist during the holiday season selling their respective smart speakers and turning it into a brilliant strategic coup over Apple. Reuters created an advertisement for these speakers that delivers a deep disconnect to reality.
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