Apple Investors Shouldn't Hold Their Breath Waiting for This

By Markets Fool.com


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Last week two reports came out about Apple's (NASDAQ: AAPL) plans to introduce a competitor for Amazon's (NASDAQ: AMZN) Echo and Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google Home smart hub.

The Information said Apple is developing a new product to take on the Echo, with similar features like a speaker and microphone for voice commands. Meanwhile, VentureBeat wrote that its sources say that Apple will upgrade its Apple TV device by adding a speaker and microphone (the current version has a mic in the remote, but is only used to search for streaming content).

It's clear that Apple is looking to take on Google and Amazon in the connected home space, no matter which source is more accurate.

I tend to think Apple will simply upgrade the Apple TV with smart capabilities because the device already has an established brand, and having two different Apple devices in the living room would be redundant.

But the bigger issue here is whether or not Apple can successfully compete in the smart hub space -- or if it's simply entering the market to keep up with the competition (Hint: I think it's the latter).

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Amazon and Google are the smart home standard

First, let's get this out into the open: Apple has already fallen behind in the smart home space.

For the past two years Amazon's Echo speaker has been the only viable smart home hub on the market with a voice assistant (Alexa), third-party integration, and true connectivity with other parts of a connected home.

Amazon has opened up Alexa to work with a variety of other devices, so that its Echo speaker can control everything from a Nest thermostat to asking it how much gas you have in your car.

Google has taken notice and introduced its own smart home hub, called Home, last month. The device integrates one of Google's strongest features -- its voice search -- into a device that sits in your living room and answers questions, makes dinner reservations for you, and keeps track of your calendar.

Google's advantage in the space is its top-notch voice assistant, which it's calling... wait for it... Google Assistant, and its ability to marry that feature with finding relevant information.

And while Google Home hasn't even hit the market yet, I've used Google's voice search on my iPhone enough times to know that having a device in living rooms with the same capabilities (and more) could quickly become a go-to device for unanswered questions.

Meanwhile, Apple has a box that can play video content and music through your TV, and that just got Siri integration.

It's long been rumored that the company would turn Apple TV into a smart home hub, and now it appears it's finally moving in that direction. But at this point it's hard not to think that Apple is just playing catch-up to Google and Amazon.

And worst of all, I don't see how it has any advantage in the space right now.

Ecosystems aren't all that great these days

In the not too distant past Apple would have had an advantage in the smart home space because of its vast ecosystem of iPads, iPhones, and apps. It's been a coveted network of devices and services for a long time, but what matters now is compatibility. And Apple hardly plays well with others.

Smart homes are a hodgepodge of devices from different companies, all working together to bring automation into the home. The key to their success is that they can communicate with each other, and that they're easy to give commands to.

VentureBeat says Apple will open up Siri to developers so that they can create some of the same integration that the Echo already enjoys, but at best that would put the device on par with the Echo, not necessarily make it better.Siri is hardly a beloved feature even by the most diehard Apple fans -- and in the smart home space the voice assistant takes center stage.

It's hard for me see where Apple would have an advantage over Google Home or Amazon Echo. Sure, the Apple TV is a popular device, selling an estimated 37 million units since its 2007 launch, according to Strategy Analytics. And an upgrade could help those numbers improve, but don't expect Apple's announcement of a smart home hub (if there is one) to beat the competition. Apple is great at selling devices, but it fails to be impressive with its digital assistant and typically doesn't like opening up its devices to play well with others.

The article Apple Investors Shouldn't Hold Their Breath Waiting for This originally appeared on Fool.com.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Chris Neiger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon.com, and Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.