Apple Puts Siri Helper at Center of Growing Home-Tech Empire

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Story image for Home Tech from Bloomberg

Apple Inc.’s first major new product for two years, the HomePod speaker, marks the biggest effort yet from the technology company to use its Siri digital assistant to keep customers wedded to a growing palette of products and services.

The smart speaker works by talking to an updated Siri that better understands music-related requests, Apple said during its Worldwide Developers Conference in San Jose, California.

“Apple is a company that deeply cares about music and wants to deliver an audio experience in the home,” Apple Chief Executive Officer Tim Cook said in an interview with Bloomberg’s Emily Chang. “We feel like we reinvented that in the portable player area, and we think we can reinvent it in the home as well.”

Cook and other Apple executives showed off several additional new Siri functions, highlighting how the company has been working to catch up with similar offerings from Alphabet Inc. and Inc.

“It’s clearly about the hardware but also making Siri more obvious to consumers so you can see where she’s getting smarter,” said Carolina Milanesi, an analyst at Creative Strategies. “Apple today was much more focused on talking about it.”

Apple’s Cook Says HomePod Reinvents Music in the Home

Amazon’s Echo, introduced in 2014, helped put the e-commerce giant’s Alexa virtual assistant in millions of homes, while Alphabet’s Google Home serves as a new voice-based gateway to the search company’s services. The HomePod will take Siri from iPhones into more homes and turn it into more of a hub for Apple’s other products and services.

“For us it’s not about being first,” Cook said in the interview. “It’s about being the best and giving the user an experience that delights them every time. And so we don’t let that impatience result in shipping something that’s just not great.”

WWDC is Apple’s annual pitch to software engineers to continue building programs for the iPhone, iPad, Mac and Apple Watch. Many of those apps are sold via the App Store, which was revamped, and Apple gets a cut of all those sales. Cook is aiming to double services revenue, which also includes products like iCloud and Apple Music, to around $50 billion by 2020.

At $349, the HomePod is more expensive than the most-expensive Amazon Echo — the $230 Echo Show — and the Google Home, priced at $129. But it’s a lot cheaper than the iPhone, which starts at $649 and is currently the main way people access Siri.

Apple pitched its speaker as primarily a music device, saying it links tightly with the company’s Music streaming app, which brings in $10 in revenue per user each month. Users will also be available to control smart home products such as connected lighting by speaking to Siri through the HomePod.

Consumer spending on smart home related products and services will reach nearly $90 billion this year and reach $155 billion by 2022, according to consultant Strategy Analytics. Amazon dominated shipments in the three months through December, selling 88 percent of the 4.2 million smart speakers sold globally in that period.

Siri was also front-and-center of Apple’s machine-learning, a type of artificial intelligence that helps software adapt to data and recognize patterns automatically.

“We want powerful machine learning to be easier to use in your apps,” software chief Craig Federighi said as he unveiled a toolkit that allows developers to use Apple’s AI technology.

For instance, if a contact sends you a request for money, Siri will immediately surface the new Apple Pay feature in your messages which allows you to make person-to-person payments, a challenge to PayPal Holdings Inc.’s similar Venmo system. Siri also has a new screen in the Apple Watch which presents data and information that may echo earlier behavior at a similar time of day or the week.