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Ooops, Apple Did It Again

Not content to rest on its laurels, Apple apparently decided to double down on the mistakes it make on its Apple TV product, incorporating most of them into its new HomePod voice-enabled speaker.

The tactics seem designed to ensure that Apple remains perpetually behind the competition,

The HomePod’s problems start with price: it’s $350, versus $180 for the Echo and $120 for the Google Home.

That means it has to be twice as good as Echo and three times as good as Home.

It’s not.

At the WWDC this week, Apple made a big deal over the superior sound quality of its HomePods.  I’m thinking some audiophiles can probably detect the difference. But for the remaining 98% of us, the Echo doesn’t sound a whole lot worse, certainly not $170 worse, and if it does… you can just buy a $50 Dot and hook it up to the speakers of your choice, which quite likely blow the HomePod out of the water.

Then there’s Siri.

Yes, Apple made some improvements to it, but well, it’s still nowhere near Alexa. That’s because Amazon has opened up Alexa to third party developers for years, so I can use it to dim my lights, check a flight, call an Uber, adjust the thermostat, find my phone, play Jeopardy and hundreds of other Skills. Now granted Siri may be able to do all that someday, but do I want to wait? Especially given Siri’s track record of only understanding every third word I say to it.

But the biggest error is one that Apple keeps making over and over: trying to keep the walled garden thing alive. So that HomePod only plays Apple Music. Not Spotify (which has close to twice as many users overall and slays Apple Music 47% to 14% among Millennials). It also doesn’t play Pandora, TuneIn, or IHeartRadio.

And that’s the death knell in a nutshell. When 47% of your potential new audience gets its music from a service you don’t have (versus 14% who do) you’re kind of dead in the water.

Why This Keeps Happening

In the 00s, Apple stumbled onto a great formula: they’d find a technology where other companies had done the dirty work of building and establishing a market (MP3 players, smartphones, tablets) and then come in with a better product with a much better interface than the engineer-designed competition, charge a premium price for it, and take over the market.

But it’s 2017 and that trick doesn’t work anymore. The products creating these new markets aren’t schlock, they have loyal user bases and the lower prices matter. There aren’t a whole lot of impressive improvements Apple can make. So Apple Music continues to struggle against Spotify. And Roku has 49% of the connected device market, crushing the three-times-as-expensive Apple TV.

So much for closed systems and premium prices.

But Billions

Don’t count Apple out just yet though.

They’ve got more cash than they know what to do with, thanks to their healthy smartphone and and laptop businesses. So they can easily buy their way out of their current hole. As in buy Spotify or buy Roku (to name but two possibilities.)

The question though, is will they?