Apple Unveils Smart Speaker Called HomePod -- 5th Update

By Tripp Mickle Features Dow Jones Newswires

Apple Inc. on Monday revealed a premium voice-activated speaker called HomePod and announced a series of upgrades to its line of Mac computers and iPads as it looks to bolster its product lines amid rising competition from rivals like Amazon.com Inc. and Microsoft Corp.

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The hardware announcements were the first Apple had made at its annual Worldwide Developers Conference since 2014. Collectively, they signaled Apple remains intent on being more than just an iPhone company despite the fact that the device accounts for two-thirds of global sales, and drives so much investor interest that anticipation of a 10th anniversary device later this year has sent the company's stock to record levels.

The HomePod speaker garnered much of the attention of the 5,300 developers attending the event in San Jose, Calif. Apple also introduced a series of software updates, including payment-to-payment capabilities for Apple Pay and a platform for developers to design augmented-reality apps.

The speaker, which will cost $349 and be available in December, is the third new product category Apple has entered since Chief Executive Tim Cook assumed leadership of the company in 2011. The Apple Watch, which launched in 2015, has failed to drive the type of widespread consumer demand of the iPhone, and AirPods, the wireless headphones introduced in September, have been challenged by production issues.

Apple is a late entrant to the rapidly growing speaker category. Amazon.com Inc. pioneered the category with its Echo device in 2014 and has sold an estimated 11 million speakers. Alphabet Inc. followed with Google Home, a speaker introduced last year, and Microsoft's Cortana assistant will be featured in a speaker from Harman International Industries Inc.

About 36 million Americans will use a voice-enabled speaker at least once a month this year, more than twice as many as a year ago, according to eMarketer, a market-research firm. The virtual assistants that power those speakers are increasingly being added to everything from refrigerators to thermostats and will be available across more than 4 billion consumer devices by the end of 2017, according to IHS Markit.

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Siri, Apple's virtual assistant, will serve as the operating system for Apple's speaker, playing requested songs and controlling home products like thermostats and lamps programmed to work with Apple devices. The company said communication with the HomePod and Siri will be encrypted to protect user privacy.

Apple said it is updating its iPad Pro with a 10.5-inch Retina display and a refresh rate the company said is twice as fast, making videos smoother and crisper. Smaller exterior borders around the screen make the display 20% larger than its predecessor.

Sales of iPads have fallen for three straight years, and the tablet category overall has slowed as consumers embrace detachable products like the Microsoft Surface, a tablet that comes with a keyboard. The iPad Pro has tried to address that with a smart keyboard sold separately, but it has been unable to return Apple's tablet to sales growth.

New software for the iPad will feature a dock at the bottom of the device, so that users can move in and out of apps more simply. It also has drag-and-drop capabilities so that users can transfer information from a website into an email with ease. The result is a system that has more of the functionality of a computer.

Apple Pay, meanwhile, is being updated with a new payment-to-payment system, allowing users to send money to friends and family within the iPhone messages system.

The company also said it is injecting more artificial intelligence into its Apple Watch, updating software to automatically surface information for users and revising its music feature to show playlists and album art.

Apple is adding Siri intelligence to the Watch. The service, which has been available on the iPhone for more than a year, will use machine learning to adapt automatically to a user's routines, serving up prompts for running apps for those who regularly run in the morning or afternoon.

"This is an intelligent active assistant right on your wrist," Apple's Vice President of Technology Kevin Lynch said.

Mr. Lynch said Apple is updating the music feature on the app, making playlists available and album art. To date, the music feature has been relatively bland, offering just the song name and an arrow to advance songs.

Fitness remains a key focus on the Apple Watch. The company said its software has been updated to offer high-intensity interval training. It also has worked with gym equipment manufacturers, so Apple Watch users can sync with machines they work out on in the future. Apple Watch will add coaching algorithms to tell users how much they need to walk to hit fitness goals at the end of the day.

Apple also said Monday that Amazon.com Inc.'s Prime Video will be added to its Apple TV devices later this year. The lack of Amazon's streaming service was seen as a hole in the Apple TV's lineup.

Additionally, Apple played up virtual reality with both its Mac hardware and software, announcing it is updating its line of iMac desktop computers with new chips from Intel Corp. that increase processing speeds and improve graphics.

Apple also said it is updating its entire line of MacBooks with Intel's seventh-generation processors known as Kaby Lake. The refreshed MacBook Air, MacBook and MacBook Pro began shipping on Monday.

It also said its new Mac High Sierra operating software offers new features for developers designing virtual reality games and experiences. During a demonstration, developers from Epic Games and Industrial Light and Magic demonstrated the way designers could shoot fire inside a virtual reality design of "Star Wars."

Apple also said it has updated Siri, making its voice sound more natural and giving it translation abilities across about five languages. Now users can say, "How do you say, 'What are the most popular dishes in your restaurant' in Chinese?" and Siri will reply in Mandarin for the user. Other languages include English to German, French and Spanish.

Write to Tripp Mickle at Tripp.Mickle@wsj.com

Apple Inc. revealed a voice-activated speaker on Monday, thrusting itself into the rapidly escalating fight between the biggest names in technology to control the home through a tabletop device.

The growing sophistication of virtual assistants such as Apple's Siri, Amazon.com Inc.'s Alexa and Alphabet Inc.'s Google Assistant has made it possible to embed artificial intelligence in everyday home devices, letting people unlock doors and dim lights using only their voices. Apple launched Siri in 2011 but has since fallen behind, tech developers and analysts say, as Amazon and Google released digital butlers custom-built around users' data.

Apple's HomePod speaker, which was introduced at its annual Worldwide Developers Conference, will cost $349, nearly double the cost of Amazon's $180 Echo speaker. The 7-inch cylindrical speaker will be available in December.

Amazon is estimated to have sold about $1 billion in speakers in about two years in the U.S., and the category is still growing, according to Michael R. Levin, co-founder of Consumer Intelligence Research Partners. "There's a reason Apple's diving into it. Apple's trying to sell more hardware because its iPhone sales at least in the U.S. have started to plateau," he said.

Amazon's Echo, introduced in late 2014, helped turn stand-alone speakers into gadgets that could double as a command station for the home. Alphabet followed with Google Home in 2016, and others are crowding into the space, including Microsoft Corp.'s Cortana assistant, which will be used in a forthcoming speaker from Harman International Industries Inc.

About 36 million Americans will use a voice-enabled speaker at least once a month this year -- more than twice as many as a year ago -- according to eMarketer, a market-research firm.

The virtual assistants that power those speakers are increasingly being linked to everything from refrigerators to thermostats -- devices that aren't part of Apple's ecosystem. More than 4 billion consumer devices by the end of 2017 will make use of some kind of digital assistant, according to IHS Markit.

As the category grew, Apple continued to emphasize its iPhone, noting that unlike a speaker gadget, its smartphone travels with users and is capable of using Siri to perform many of the same tasks. Still, the category posed a risk to Apple, giving people who may not want to be tethered to their phone at all times a reason to potentially shift to a rival's speaker.

With the HomePod, Apple is taking a different approach than its peers, emphasizing its sound quality and ability to play music over its ability to perform tasks.

The HomePod's introduction Monday capped a two-hour-plus keynote event headlined by Chief Executive Tim Cook. Apple also used the gathering in San Jose, Calif., to show a new screen design for its iPad Pro and a series of upgrades to its line of Mac computers.

As it has in past product announcements, Apple stressed privacy as a hallmark of the device. It said communication with the HomePod and Siri will be encrypted and disassociated from the user after six months to protect privacy -- an aspect it hopes differentiates HomePod from Amazon's Echo and Alexa, which keep voice interactions until asked to discard them.

Siri will serve as the operating system for the HomePod, playing requested songs and controlling home products like lamps programmed to work with Apple devices.

Siri is both an asset and a liability for Apple. The assistant is available in 21 languages and 36 countries, making it possible for Apple to quickly expand HomePod beyond its initial markets -- the U.S., the U.K. and Australia -- and into countries like South Korea, the Netherlands and Russia. Google Assistant is available in seven languages, and Amazon's Alexa currently speaks English and German.

However, Apple has been slow to open Siri to outside developers. Last year, it made Siri available to about a half-dozen types of apps such as ride-hailing and payment services -- a contrast to Alexa, which has more than 12,000 voice-activated apps that allow users to play trivia games like "Jeopardy" on command or order pizza from restaurants that partner with Amazon.

Apple is "at risk of losing the lead by underestimating the value of third-party apps," said Gary Morgenthaler, a venture capitalist and Apple shareholder who invested in Siri before Apple acquired it in 2010. "That's surprising because Apple invented the App Store."

The HomePod is the third major piece of hardware that Apple has launched since Mr. Cook assumed leadership of the company in 2011. The Apple Watch, which launched in 2015, has failed to drive the type of widespread consumer demand of the iPhone, and AirPods, the wireless headphones introduced in September, have been challenged by production issues.

In unveiling the HomePod, Apple said little about how the device would work in running the home. It didn't, for example, say whether the gadget would work with Apple TV, the company's streaming video box, or whether it understands the distinct voices of different members of the family, who might be using different digital calendars.

Jan Dawson, chief analyst for Jackdaw Research, expects the HomePod to do well with Apple's loyal consumers but struggle to grab a significant chunk of the market because of its premium price.

Apple Senior Vice President Phil Schiller, who introduced the HomePod Monday, said it would reinvent the way people listen to music in their homes.

It features an Apple-designed woofer for bass and can adjust the sound it projects based on a room's acoustics. "It has incredible clarity and precision," Mr. Schiller said.

On Monday, Apple also announced an updated iPad Pro that it hopes can end a three-year slide in its tablet sales. By thinning the device's bezel, Apple said it increased screen size by about 20% to 10.5 inches. It also said it improved refresh rates to make playing videos smoother and crisper.

Apple also unveiled a new iMac Pro desktop that will feature more powerful processors that improve computing speed and graphics. Its MacBook Pro and MacBook also are getting chip upgrades and its MacBook Air is getting an updated processor.

On the software front, Apple Pay is being updated to allow users to send money to friends and family within iMessage. Apple also showed its growing interest in augmented reality with a developer platform called ARKit that allows app makers to develop games and features for the iOS 11, its new mobile software.

Write to Tripp Mickle at Tripp.Mickle@wsj.com

(END) Dow Jones Newswires

June 05, 2017 19:57 ET (23:57 GMT)