Apple’s slow-paced strategy in the smart home race threatened by Amazon

“In less than a year, Amazon’s combination of the Echo speaker system and the Alexa voice-controlled digital assistant has come close to delivering on the elusive promise of easy-to-use technology that can control gadgets in the home with a few spoken words,” Stephen Nellis reports for Reuters. ” Inc’s surprise success sets up a long-term battle with Apple Inc. and Alphabet Inc’s Google for primacy in the connected household. And the contours of that competition are following a classic tech industry dynamic.”

“Amazon is pursuing an open-systems approach that allows quick development of many features, while Apple is taking a slower route, asserting more control over the technology in order to assure security and ease-of-use,” Nellis reports. “The strategic importance of the ‘connected home’ niche looms large: Amazon wants a way to own its customer interactions -mainly shopping online – without an Apple phone or a Google Web browser as an intermediary.”

“Apple needs to keep the iPhone at the center of customers’ lives, and has built a whole home automation architecture, called Homekit, into its smartphone,” Nellis reports. “Google is behind in the race, with its speaker only hitting the market in November and compatible with a handful of gadgets beyond Nest and Dropcam, which the company also owns.”

“Mark Mahaney, an analyst and managing director with RBC Capital Markets, estimates Amazon sold as many as 10 million Alexa-enabled devices over the holiday season,” Nellis reports. “Google hasn’t disclosed sales for its Home speaker. Apple has declined to comment on reports that it has a voice-activated speaker in the works.”

“Amazon acknowledges that unlike Apple, it can’t guarantee the security of third-party devices. A company spokeswoman did note that sensitive commands like unlocking doors have an extra layer of security such as a voice-controlled PIN,” Nellis reports. “Still, it’s not clear whether Apple’s elaborate but slow-to-develop system will have enough advantages to overcome Amazon’s widening lead.”

Read more in the full article here.

MacDailyNews Take: Apple’s path is much, much more secure and the quality of the interactions between components in much more guaranteed (it just works). That said, one need only look at a Windows PC (Mac knockoff) or an Android phone (iPhone knockoff) or a Windows/Android tablet (iPad knockoff) to see that the world is littered with wannabes that, for the undiscerning riffraff, seems “good enough” on which to waste their money.

As for Amazon Echo-type devices:

Something along the lines of Amazon Echo is what Apple should have done if run by competent, forward-thinking management. When Apple finally does do their version of Amazon Echo (and they will get around to doing such a product eventually) they will rightly be called a follower. The company had all of the ingredients to make their own Echo, before Amazon, except for the vision, it seems.MacDailyNews, March 29, 2016

And, as we wrote last June:

There could be a psychological component to this that leads people use Alexa over Siri precisely because they know the Echo is there (it’s a physical object), but forget about Siri being everywhere, even on their wrists (because Siri is embedded inside devices that are “for other things” in the user’s mind (telling time, watching TV, computing, phone calls, etc.) and therefore “hidden” to the user. Hence, Siri gets forgotten and goes unused while people use Alexa…

Again: We believe people use Alexa because Amazon Echo is a physical manifestation of “her,” while forgetting about Siri even though she’s on their wrists at all times and/or in their iPhones and iPads because Siri is hidden inside objects whose primary function is something other than “personal assistant” in people’s minds (watch, TV, phone or tablet, as opposed to “Siri.”) Alexa is present thanks to the Amazon Echo. Siri is absent because she has no such counterpart; no physical manifestation.

Siri is a ghost. Alexa is that cool, fun, glowing tube right there on the counter.

Apple would do well to not discount the psychology behind why people use certain features, even though cold, hard logic tells them it’s a redundant and unnecessary product.

An “Apple Echo” device would sell in the millions of units per quarter and boost Siri usage immensely.

Again, boosting Siri usage will improve Siri for everyone as it will more input data (“Ah, input! More input!” – Number 5) from which to learn.

24.5 million voice-first devices will ship this year; mainly Amazon Echos – January 26, 2017
Apple’s Amazon Echo echo: What if AirPort Extreme becomes the Siri speaker? – December 1, 2016
Apple abandons development of wireless routers – November 21, 2016


  1. What about just a dock hooked up to your home sound system or built in speaker that you simply plug an iPod touch into? Or a recessed dock where one’s thermostat it. It becomes a Nest and an Echo at once. I agree they’re behind. Why don’t I get a message notification while watching my aTV? Why can’t I plug a camera into it and FaceTime through my TV? Seems like no-brainer stuff

    1. Cook couldn’t care less about the home. With SIRI beta introduced with the iPhone 4S, Apple had the biggest lead in AI and we all watched lazy, greedy, incompetent Tim Cook quickly piss it all away.

      How Apple’s stock has remained to do as well as it has is beyond me. I stopped buying Apple products long ago, due to the fact that Cook has gone out of his way to release unbuyable products.

    1. The Airpods are a homerun?

      I guess you don’t know that the Airpods:

      Annoyingly and randomly disconnect.

      Have problems reconnecting between synced devices.

      Shut down for no apparent reason.

      Have questionable sound quality.

      Have dubious battery life.

      Will not arrive for weeks (even months) after placing an order; AKA a typical Tim Cook Launch.

      Are prohibitively expensive at $160 for a common pair of bluetooth headphones with an Apple logo attached (I suppose the extra $120 is for the logo).

  2. At this point there doesn’t seem to be much for the undiscerning riffraff to discern. Amazon is VERY present, Goggle is knocking on the door and Apple has a thing called a tv that’s not a tv but more a Netflix streamer. Yes, I’ve heard it called that. To engineers, we understand that Siri on an iPhone is just as good, with plenty of room for improvement, as Alexa. But the non-engineer mind knows that Siri is a phone and Alexa is like a goddess – no real body because you call out to nothing. She gets you lots of goodies and, for those goodies she can’t get, she can help you keep a list of which ones to buy next. No typing, no device – it’s like prayer. Google and more so Amazon are entrenching themselves with the next generation of “undiscerning riffraff” that they fought for while Apple sits on its ass in the corner. I really take offense to the name calling when Apple doesn’t even seem to be putting up a fight. For some people, the first guy to seemingly pay attention must be the one most able to help. Nevermind that a year later Apple says it can do even more. Those customers are loyal to the guy who listened first. That’s their priority. And for that MDN calls them riffraff as we pray into our AirPods all day for an item that doesn’t show up til we tell Alexa to get it for us.

    1. On the Mac side I have to agree that there’s little to discern from your average PC these days. The OS X UI borders on ancient with key features like Spotlight completely broken. I’m really hoping that the new file system brings new life to the platform.

      1. Compare: Android = Open, full of holes, hackers dream, fragmented mess!!

        Again, Amazon = Hackers dream, so insecure; buy their solution & await your fame as your device cameras give up your families home secrets!!

        1. Yup. Amazon themselves say that Echo cannot guarantee security, especially with things like smart door locks. I’m betting that Google Home is similar. Apple will most certainly be able to say the opposite.

  3. I’m reposting this because it’s still true and I honestly don’t get this nonsense:

    I’m going to say this again, for the hundredth time: AMAZON has provided no numbers to back up anything regarding the echo’s “success”. There is zero evidence of it actually being over 4 million units (which is the minimum definition of “most” out of 8 million)… I do not believe that if 33 million devices are “shipped” this year, that amazon will have over 16 million since they NEVER announce any kind of sales figures at all. But rest assured, if apple enters this new deliberately cut out market segment, and dominate it? They will be doomed because they’ll sell 18 million of the 33 and that will be “below expectations”, but amazon will still be a “success” with zero evidence… it’s like I’m living if f’ing bizzaro world now.

    1. Amazon doesn’t have to give any sales figures. Jeff Bezos is a highly respected CEO. Some consider him a visionary. He also has very close ties to some really big investors who’ve put a lot of money into Amazon. Amazon’s future is so bright that even big investors have to wear shades. It’s natural where so many big investors are involved that Jeff Bezos and company is given a free pass. There’s one thing that makes Wall Street investors very happy and that’s owning part of a company that’s going to put a lot of other companies out of business. That’s what greed is all about. Amazon will continue to be backed whether it gives any sales figures or not.

      All the articles you read about Amazon never tells about the downside. Everything Jeff Bezos does is considered a genius move. He’s considered the perfect CEO. Elon Musk fits the same category. All they ever get is constant praise. It’s just unfortunate Apple shareholders are stuck with what everyone considers a loser CEO. Everything Tim Cook does is said to be ruining Apple. It sure looks that way. I guess if you hear it enough, it’s starts to be true.

      Yes, Amazon is a success even if we no nothing about what the company is actually doing. There are lots of big backers who will turn the company into a “success” no matter what. Big investors have no choice but to keep pushing Amazon higher and higher so they continue to gain money from their investment. As far as I can tell, Wall Street believes Amazon is the PERFECT company while they believe Apple is nothing but a has-been loser of a company no matter what Apple tries to do. Simply bad luck for Apple shareholders.

    2. Some articles that popped up with “amazon echo units sold”:

      More of a blog, but seems pretty reasoned out:

      Another article released from Morgan Stanley also noted that their estimate of 11million units to date worldwide is probably low since the survey numbers they based their estimate on only includes data from mid 2016 to the first day of December.

      1. Yes, but those are all guesses with no hard numbers to back it up. People guess about iPhone sales all the time and are frequently wrong when apple posts real numbers. And Amazon has no track record of transparency at all

        1. True, but at least these guesses have some reasoning at how they were arrived at and not totally random speculation. I think I tend to believe the amount based on how many units I see in use among my friends and associates. The Fire phone in comparison, I hadn’t seen even one unit purchased in the same group of people.

  4. I have an automation setup in my home – I use SmartThings, and I’m very happy with it. I have 60 or devices attached, including thermostat, HUE lights, door locks, garage door opener, and various Z-wave and Zigbee switches & sensors.

    My system works great, is easily adjustable, and performs many functions automatically dependent on sensing movement on certain motion sensors, dawn or dusk, or geolocation of my iPhone.

    I’ve looked into using HomeKit to replace my SmartThings hub, but it appears that HomeKit only uses a few of my already in place pieces (namely HUE lights, my Thermostat and my garage door opener). It looks like Apple doesn’t use Z-wave or Zigbee tech, which means that all of my door locks, switches, sensors, etc. that do use that tech would need to be replaced – and every replacement looks like it cost 2x what I paid for the current items.

    I just can’t justify going through all of the expense to just to have voice control, when I already like the way my system works.

  5. If memory serves me correct Apple decided not to release any sales numbers for iPhone 7. Apple has never released sales numbers for the Apple Watch. Apple is making a mistake by abandoning Airport devices, Apple monitors, Mac Pro and telling all the pro users that they don’t matter anymore. Apple needs to lead and make products that people want. There are plenty of people out there that want these products, they shouldn’t just sell Notebook computers and Telephones… My 2 cents

    1. No, they release sales numbers for every product except Apple Watch citing competitive reasons. The iPhone 7 launch weekend sales weren’t announced because of the pre order volume, and they said as much. Apple also has a proven track record over the last 2 decades of reporting completely transparent sales figures while amazon has no track record of it, and the only time they had to was with the fire phone when federal law requires activations reported. It was a complete flop. They have no track record at all, they should not be believed at all, just as any number reported by Microsoft should not be beloved because of a 30 years track record of manipulating and double counting. Not the same thing at all.

    2. Also, the “abandonment” of AirPort is not an official annouclemt and is based on a rumor. Do not conflate rumors with facts, feelings with proveabke data, and perception with reality.

      1. I can agree with that. All we know is that Apple has disbanded its wireless router division based on a Bloomberg article. Many other articles have used that as a source for their own postings. The AirPort routers are still on the site so I suspect they are still being manufactured.

  6. Let’s try to be a bit creative to see if we can predict the future. The beginning of MDN’S summary could very well have read something like this:

    “In less than a year, Google’s combination of the Motorola Droid and the Android mobile operating system has come close to delivering on the elusive promise of easy-to-use technology that can search the internet and collect personal data,” ” Inc’s surprise success sets up a long-term battle with Apple Inc. and Microsoft/blackberry for primacy in the connected mobile user. And the contours of that competition are following a classic tech industry dynamic.”

    “Google is pursuing an open-systems approach that allows quick development of many features, while Apple is taking a slower route, asserting more control over the technology in order to assure security and ease-of-use,” Nellis reports. “The strategic importance of the ‘mobile device’ niche looms large: Google wants a way to own its customer interactions -mainly selling to advertisers.”

    So how has Google faired with this strategy? Well, 75% of their mobile profits come from iOS, and Apple commands 90%+ of the mobile device profits.

    Admittedly, the voice controlled device/IOT paradigm is a bit different. But the respective business models aren’t- Amazon and Google MUST design their products to boost website activity (Amazon) and sell ad space (Google). Their focus is on information, not product. Apple wants to sell product, and they have much more flexibility and scale potential with making the product do what the paradigm (i.e. AI interactions) requires. Apple just needs to do what they do best- integrate!

    1. I can agree with your view of Amazon in your last paragraph that they “MUST design their products to boost website activity”. I would submit however that in Amazon’s case, actually selling product and services is the primary driver over gathering information. Their own branded products focus on that purpose.

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