Apple’s not late to the Home Assistant market. Because there isn’t one. Yet.
HomePod is going to miss the holidays. But how can Apple be late to a market that doesn’t really exist yet? With Jan Dawson.
Rene Ritchie28 Nov 2017
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Rene Ritchie: I’m Rene Ritchie and this is “Vector.” Vector is brought to you today by Mint SIM. Mint SIM is “bring your own phone.” As long as it’s unlocked and compatible with Mint SIM’s US network — which is one of the largest in the country — you are good to go.
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Today’s guest is Jan Dawson. How are you, Jan?
Jan Dawson: Good. How are you?
Rene: Good. I saw you announce on Twitter, you know, those tweets that you both look forward to and feel afraid every time you see them where you have, “I have some personal news?”
Jan: Yeah, I even use the cliché, “Some personal news.” It does feel like a cliché at this point. It feels like it’s almost obligatory to publish a medium post to go along with that tweet, as well.
Rene: You’ve been on previous podcasts we’ve been on together. You’ve been an analyst…how long has it been now, 15…?
Jan: 17 years.
Rene: 17 years, wow. You’ve always been one of the analysts that I’ve followed closely because I love the way that you can distill complicated information about the PC, the wearable, the assistant, all these different technologies that are so newsworthy right now into very simple, digestible information.
Jan: Thank you. I appreciate that. That was kind of you.
Rene: You’re going to go in a different direction soon.
Jan: Yes, that’s right. I’ve been doing this for 17 years now. I did for 13 years as part of a company based in the UK, which is where I started out and where I’m originally from. Then, for the last four years, on my own working as an independent, freelance analyst, if you like.
That whole 17 years has been, as an independent analyst where the value was that I wasn’t employed by a particular company in the industry. I provided this independent, external perspective that was unbiased, that was hopefully honest and that was intended to be helpful to the company without just telling them what they wanted to hear.
I had the privilege here in my career to do that kind of work for many different companies in the consumer technology space and beyond, as well. I covered various other areas in the past. Now, I’m taking a job to go work inside one company, it’s a local company here in Utah called Vivint Smart Home, where I’ll be doing some of that same work but internally for them specifically.
Rene: I wanted to grab you because you never know what a company’s policies are going to be on podcasts. The minute I saw that I like, “Wait, no. I have to talk to you again before you go.”
It is a time of transition for you personally, but also for the industry.
*Nix and WebKit in every pocket
Jan: Absolutely. It feels like a fascinating time in the industry. I signed off from Tech.pinions, of the sites I contributed to, last week with a piece there about the state of the industry.
I’m an optimist by nature. That’s who I am. I tend to look on the bright side. If I think back over that 17 years and all that’s changed in the industry there’s an enormous amount of stuff that’s changed, from going from narrowband to broadband on the wired side, then a few years later seeing the same thing happening on the mobile side.
Seeing the rise of smartphones, the rise of a company like Apple in the phone space, but then, also, the rise and fall of various other companies, some of which seemed absolutely dominant in their market and have basically disappeared at this point or become shells of their former selves.
All the new stuff that’s happening now, too, from AI and machine learning infusing everything to augmented and virtual reality and some of the new experiences that those are powering. The underlying technologies in terms of displays and cameras and things getting vastly better over time, as well.
Rene: I think if I’d went back and told 17-year-ago Jan that by now almost everyone in the world would have some version of a Nix operating system running some derivative of KHTML, both of us back then would have thought we were insane.
Jan: Right, absolutely. This is one of the funnest things about the tech industry. One of the things I’ve loved about being an analyst is, on the one hand, you’re called on to make predictions about the future to, in many cases, actually do forecasts for products, and how big they’re going to be, and so on.
The reality is once you get more than a few years out it’s incredibly difficult to predict where things are going to go. I always laugh when I see forecasts that are 15 years out or whatever, especially if they’re numerical forecasts.
Something like half the companies in your forecast aren’t going to exist anymore. There’s probably going to be some new technology that’s going to completely obsolete the whole category that we’re talking about.
It’s always fascinating to me that the desire to know about the future and yet the inherent unknowableness of the future, as well, because things change so fast. There are always things that spring up that we simply can’t predict that far out.
Rene: I’ll tell you, I’ve always loved analysts like you and like the more independent analysts because my previous background was in enterprise. I had to deal with the big house analysts. It was so bad, I could not watch “House of Lies,” the Don Cheadle show, because it gave me too many negative flashbacks. It was like post-traumatic stress.
You guys do really, really interesting work. Everyone remembers the famous stories, right? Some of the big companies would say, “Windows Phone will be the biggest smartphone on the market by the year 2015,” or something. It looks ludicrous in hindsight.
I think when you look at it on the smaller…when you look at an array of technologies in smaller time increments you can see more interesting patterns.
Jan: Yeah, for sure.
We did some interesting exercises when I worked for the previous firm that I worked for as an analyst. We had a project, and I’m trying to think what exactly the timeline was. I think it was around 2010. We had this project around 2020, essentially, looking forward.
It wasn’t so much about the numbers. It was more about the shape of the industry. This was specifically about the telecoms industry that I was covering at the time, although I included things like devices and so on, as well.
I think we got a lot of this stuff right. It’s interesting. We’re only three years out now from that and things haven’t panned out exactly how we said. Some of the underlying trends are fascinating to think about.
One of the things we talked about the boundaries between categories of players are going to be a lot less clear than they were in the past. You’re going to get players that have come from many different industries that end up looking a lot like the same kinds of companies.
They’re going to compare hardware, software, services, content, and so on, and somewhere to deliver all of that to you over the Internet, obviously, and various other things.
It has been interesting to see how companies as disparate as Google, and Microsoft, and Apple, and Samsung, and Facebook, and so on, and Amazon have all converged into this space where the balance of what they offer is different.
The way they provide it is different but if you were to look at a checklist of things they now provide or offer, or try to provide or offer to us, as consumers, in many cases there are a lot of similarity between those things, even with their very different heritage those companies come from.
Rene: I think that’s very true. I think it would be fun, before you ride…I know you’re not riding off into the sunset in a literal sense but in the way that I’m used to seeing you talk about technology on Twitter. One of the most interesting areas right now is voice assistants. We’ve seen it mature from…
It was in the age of sci-fi for a while, where you had things like “Knight Rider.” Technology that really was fantastic. “Computer,” the “Star Wars” quintessential one.
Now we’ve seen many companies enter into it, famously Apple with Siri, Amazon with Alexa, Google with Assistant, which they very purposefully not humanized in the same way that Apple, and Alexa, and even Microsoft have with Cortana.
We’ve seen those now be licensed to other vendors. For example, Sonos can incorporate one or multiple assistants into their products if they choose.
Where do you think that market is now? Where do you see it going?
Jan: I think voice has been one of those markets where there’s a lot of excitement, including one of the big new product categories in terms of voice speakers specifically, that’s emerged in the hardware market over the last few years. It feels like it’s got real legs, that it’s going to go somewhere that’s going to be at least something of a mass-market technology.
We haven’t seen a lot of those over the last few years. Where we have, they’ve tended to come from traditional players in the hardware space. Voice speakers are fascinating in that they’ve come from Amazon, first and foremost. There’s a company that has borrowed a lot of product categories from others but hasn’t necessarily originated a lot of its own successfully.
The broader voice assistant space is the one I think we need to think about here because it’s very easy to get fixated on the hardware piece that we can see. It’s a discrete product and so on.
Of course, voice assistants existed before Alexa did and before the Echo range of devices did. That’s the right way to think about this market, is that the voice assistants. That’s a market of hundreds of millions of users.
Cortana on Microsoft devices has a couple hundred million at this point. Apple has several hundred million on Siri at this point. Google has various incarnations of its various voice assistants which also have very large numbers of users.
Amazon and Alexa specifically, by that context, is very small still, even though it dominates that speaker and hardware category. I think that’s the right way to look. Oftentimes people say, “Alright, Amazon’s the leader here because they’ve got all these customers for hardware.”
Of course, if you look at the installed base and the actual number of users of these things Apple’s out in front. Microsoft and Google are in second and third, probably, depending on how you measure it. Amazon’s way behind in that space.
I think there’s a couple of things about this market that get overblown from time to time. One is Amazon’s purported lead in the market where, by any normal measure, they’re actually behind unless you look very narrowly at hardware. The other one, I think, is about the role of voice in our lives.
I see people talking about voice as the next user interface. I think that’s overblown and misleading, as well. It’s a user interface but one of many. It’s one of a number of different ways we’re going to interact with things. It’s utterly inappropriate for many different circumstances in which you find yourself. In a crowded subway car, in a quiet office.
Rene: At a family dinner.
Jan: At a family dinner. All kinds of places where it simply would be inappropriate to start talking to your devices, especially about anything remotely personal. As a result, it’s an interface. It’s a useful one in very specific circumstances but if you look at the data, and Ben Meharin and those guys at Creative Strategies have some good data on where people actually use these things.
You’ve got the car, for example. You’ve got your kitchen, probably. You’ve got a few other places where it makes a lot of sense but it’s clearly not going to be the interface we use for everything going forward. It’s going to be one in a toolset of user interfaces with touch, and typing, and various other things obviously being a big part of that, still, going forward.
I think that’s the other part of this that often gets overblown. You multiply those things by each other, Amazon’s supposed leadership, and then voice as the next UI, and you can get a very distorted picture of the market. I think we need to deflate both of those balloons a little bit and look at both of those spaces in a better, more realistic context.
Rene: It is a super fascinating narrative because if you take just what you see in American media it looks like Amazon and Alexa are this rampaging success story, that they’re way ahead, that it’s a mature market, that they’re dominating in it.
Neil Cybart, last year, had a great tweet where he said by his metrics Apple Watch, which the same people have mostly been called beleaguered or a failed product category, was actually outperforming Amazon’s Alexa or their smart speakers. I forget if they are all Alexa or if they’re Echo. Their branding’s a little bit obscure to me.
The Echo Alexa speaker systems, they were outperforming those but one was considered a huge success and one was considered a failure.
Jan: That, to my mind, goes to the funky stuff that happens sometimes in the consumer tech commentary industry where these bizarre, artificial standards are created by which different things are measured and considered successes or failures, often without knowing, A, how many have shipped, B, often without knowing what the business model is and whether the company behind the product’s actually ever going to make any money out of it.
Whether there’s a broader ecosystem behind it that can be leveraged to make it more valuable, and so on, and so forth.
I think, with Apple in particular, the standard that’s applied is inordinately high. With a company like Amazon or others that are inventing new markets sometimes the bar for performance is set incredibly low.
I think the Echo and Alexa have clearly been very successful, as I say, in creating a new product category. As we’ve been talking about, from a marketing perspective, obviously very successful because they are considered, often, the leaders in this space.
By any meaningful standard we’re selling, as an industry, relatively few of these voice speakers still relative to other big product categories. That’s worth bearing in mind, as well.
Siri vs. Alexa
Rene: It’s fascinating to me how different the two approaches were. Apple did get Siri out early on. Since then, they’ve focused on making it international, getting a lot of different language supports.
I forget what the most recent were but over time they’ve added everything from Thai to Hebrew to Arabic support for it and getting it multiplatform so it was on iPhone, on iPad, on the Mac now, on Apple TV, on Apple Watch and pushing it out that way. It enjoys very good, not perfect. There’s a lot of countries that still can’t use it, especially on Apple TV, but very good international support.
Where Amazon, with Alexa/Echo, concentrated mainly on the US for many years, very slowly pushed that out to the UK, and I think Germany, and now this week Canada. The amount of devices and languages supported were very limited at first.
Jan: I think it’s still easy for those of us in the US to forget, specifically with these voice speakers, but I think, also more generally, that some newer things that we take for granted as users as being available to us are not available in much of the rest of the world. I think Echo and Alexa is a great example of that.
It took a very long time for it to go beyond the US. It’s still in a very limited number of countries. Google Home, the Google equivalent speaker, has gone faster just because Google’s voice services have been available in other markets for longer. They’ve been able to move a bit more quickly.
Even there, they’re in half the markets than Siri is. On a global basis, Echo and Alexa are basically irrelevant outside North America and a couple European countries. Google Home’s basically irrelevant in many countries around the world, as well. It simply doesn’t exist as a product you could buy and use in your home if you speak the local language.
That’s additional important context. Apple things very globally. I did some analysis a few years back, looking at, country by country, support for various content services and things like that, as well. There, iTunes has long been one of the leaders. I think until Netflix came along and went pretty much global with its service a couple years ago now, Apple was, by far, the leader in that space.
Many other companies still offer a very limited set of countries or a very limited set of content in other countries relative to Apple, which does very well at globalizing its stuff and then increasingly localizing it in markets like China, where they’ve done a lot of work on localization for features, and content, and stuff.
We’re seeing them starting to do that a little bit in India as well at this point. I think that’s a fascinating theme, is taking some of this technology global, which means not only making it available there but also recognizing local nuances and making things available that make it more useful in those countries.
Rene: I think that’s very true. It’s also interesting from a software point of view because, again, Amazon got way out ahead in terms of opening up APIs for developers, and for media companies, and for all sorts of content to hook into the Alexa Echo system with their skill sets, but they did it in a way where you had to learn the vocabulary of the device.
You had to speak in…it reminded me, actually, of when I was learning Chinese because there’s no tenses and there’s no plurality but the word order is incredibly important to make somebody understand.
I shop today, you don’t have to say it’s in the future because I just said the word today, but you’ve got to put those things in the right order. Where Apple took a while to get Siri to market. When they did, and you can say they haven’t been fast enough in increasing the amount of domains, but the domains they did provide let you say, “Skype Jan. Message Jan on Skype. Call Jan on Skype. Get Jan on Skype.”
You can use a variety of different linguistics to trigger those services.
Jan: I think there’s a couple of things that are worth noting about those Alexa skills, as they call them. You frequently see the number reported, the total number of skills available. It’s in the thousands now. The reason why I think they focused so heavily on those skills in the early days is because Amazon actually knows how to do relatively little itself.
Compared to an Apple, compared to a Google, Amazon doesn’t have your whole communication infrastructure. It doesn’t have lots of information about your address book. It doesn’t have an email system that you use. All of that stuff is third-party to Amazon.
In order for the Echo and Alexa to be useful, they had to integrate with third-party stuff in some key areas because they simply couldn’t do that on a first party basis. I think they were forced in to that, whereas Google does have third-party apps. They brought that later because Google itself owns your email. They own your calendar. They own maps. They have information about local businesses.
There’s so much stuff that they had themselves that they didn’t need to open up to third parties. With Apple, of course, a lot of that sits in apps that already exist, and so then it’s just a matter of building the linkages between Siri and apps you already have on your phone. We’ve obviously opened that up bit by bit with a handful of domains in the first year, and a few more this year.
That set of third-party skills is important if you want to control the world beyond that specific ecosystem and that device. The way that you do that is really important. Amazon and Microsoft announced a partnership a couple of months ago, now.
Cortana and Alexa are going to talk to each other, but the way that you do that is going to be incredibly awkward, because on top of what you were talking about already, you’re going to have to say, “Cortana ask Alexa to,” [laughs] and then the specific syntax to the skill that you’re wanting to invoke and vice versa.
I think there’s a huge amount of scope here for naturalizing our language that we use to communicate with these things, making it such that you don’t have to remember. You just speak naturally and the system is smart enough to infer what you want from that, and to do what you ask it to do.
Rene: In my ideal world, Cortana, Alexa, and Siri just talk to each other, and I wouldn’t have to be involved. They would just take care of my appointments and everything all on their own. [laughs] They’d write my articles. They’d proofread them. They’d publish them.
Rene: I could just sip my drink at the poolside.
Jan: That’s right, absolutely.
Performance vs. privacy
Rene: I don’t know. I think you touched on something there. I think it’s important. For example, almost every year I buy the latest Google Nexus, because I want to see what’s going on with that ecosystem, that platform, and that hardware. This year I bought the Pixel 2.
One of the things I haven’t really been able to do is use Google Assistant, because whenever I try to turn it on…I have my issues with Google, and one of them is I believe our data is incredibly valuable, so valuable that Google and Facebook spend billions of dollars trying to harvest it every day. Well, I don’t know about day, but every month, year, and so on.
They just think we’ll give it to them in exchange for free services. On the most part, we do, but I think, honestly, they’re underpaying.
I would rather see better compensation for it, so I don’t provide them with that data. If I use Siri, I can turn off a lot of privacy things, and it’ll give me what services it can.
When I went to set up the Pixel 2XL, I got that thing again, saying you have to give us access to your web history and your app history. I don’t. I just want to ask it to set an alarm for me. It really doesn’t need my web history for that, but it’s part of the bargain that I’m paying to get those services.
I did it, because I have to review the phone, and I thought it was unfair to review it without Google Assistant, but it made me, again, understand the price of some of these services.
Jan: I think it’s one of the most misunderstood aspects of the industry in which we live. You’ve got people who are aware of it and OK. You’ve got people who are aware of it and do care, and you’ve got many more people who aren’t aware of that sort of tradeoff at all.
There’s a big sort of difference there by generation, as well as the younger generation, who has just grown up with the idea that most things online are free, and the price of admission is handing over my data, and I’m perfectly comfortable with that.
I think that may be partly that they don’t really understand the implications, and maybe that’s just the only thing they’ve ever known, so it’s familiar to them. Maybe they’re at a stage of life where they don’t really feel like they have a lot of personal information that could actually be valuable, and therefore they don’t really care about the value of that or the potential for sort of exposing that stuff.
I also think there’s some overblown rhetoric on the other side of this. “The Verge” ran a survey recently, where they asked about all the big tech companies, and how people felt about them, and so on. They used language which basically says, “Facebook sells your information…”
Jan: Of course, that’s not technically true either.
Jan: These companies collect information about you. They allow advertisers to target you with advertising, but they don’t actually hand over any information to the advertiser.
They say, you want to reach people are, you know, fans of soccer who live in Utah, whatever. They’d reach me, but they’re not telling Unilever that I personally with all my personal details am somebody who likes playing and watching soccer and happens to live in Utah.
There’s misinformation on both sides, but I think there’s also a lot of lack of understanding of exactly what these companies are getting from us, why, and how they do that. There was a great piece on “Wired” recently from somebody who I think had been a former product manager at Facebook who said something like Facebook doesn’t listen to your microphone. It doesn’t need to.
Jan: His first point was debunking a conspiracy theory. The second point was Facebook can learn plenty about you without having to listen to your microphone without your permission. You give it, willingly, all kinds of information whether you realize you’re doing that or not.
There are services and companies out there whose business model absolutely depends on collecting that information about you. There are others, Apple being an obvious one…Microsoft and Samsung, for the most part, don’t collect all of this data about you in their business models, don’t collect that stuff and make the money in other ways.
We as consumers need to be well informed on what the tradeoffs are for all of those models and make our own decisions. For some people the decision will still be, “I get enough value out of Google and they’re services that I’m happy to give my information to them.” We should be at least making informed decisions about that.
Rene: We’re going to take a quick break so that I can tell you about Thrifter. If you are listening to this the same day it comes out, Black Friday in the US, and in some other countries, then Thrifter is in full effect.
They are scouring the Internet for the absolute best Black Friday deals, and they are providing them to you in context, with explanations, why they’re good deals, what the historic prices were, just all the information you need. If you’re listening to this later, well, they’re probably still going, because I think Black Friday is really like Black Friday, Saturday, Sunday, Monday.
Anyway, the whole Thrifter team, they’re in one office. If you listened to the show a couple days ago, one office, in Miami, just working 24/7, finding you the absolute best stuff on the Internet without any of the fluff. Just go to thrifter.com and check them out.
The more they know
Rene: I used to be, and I’ve told this story before, so forgive me, but I used to be in big data before it was famous. We did a lot of the technology behind what Dunhumby and Tesco did with Clubcard, for example.
When you actually talk to them, the amount of information that they could pull. Even back then, where social was not as big as it was now, but they used to talk about beer and diapers, the person going into the store to buy beer and diapers.
Just based on their purchases and one unique piece of data, they could fabricate an entire model of this person, and then they could sell…because companies, like for example, Coca-Cola has no idea at the Quickie Mart who’s buying it, but the Quickie Mart does.
They could sell that information back to Coke, but they could sell it competitively to Pepsi, or they could sell it Fritos if they wanted better placement on a shelf next to a Coke promotion. [laughs]
To your point, they don’t really want to sell the core data because that’s their value, they want to sell access to it, and not even access directly to the data, but sort of access to what they can provide. That’s their treasure trove, the closely guarded treasure trove, but they’re using you to create all the marketing bundles and insight bundles, and whatever market analysis products they’re providing.
Jan: Right, absolutely. I think there’s this cliché that’s sort of emerged in some comment forums a few years back, where if you’re not paying, you’re not consuming the product. That resonates with people, and I see it quoted a lot.
Again, it’s a bit of an exaggeration, but the way I like to think about this is consumer vendor alignment in the sense of are my interests aligned with the interest of the company that’s providing the service to me? Is there some other entity that they’re also trying to serve and is there any tension between trying to serve me and that other entity?
In the case of advertising-based business models, there is a tension, because from an advertising perspective, you want to know as much about me as possible. From my perspective, I want to tell you as little about me as possible. There’s an inherent tension that exists in that business model that doesn’t exist in quite the same way, I swear.
You could argue, Apple – and you see these sort of conspiracy theories from time to time – sort of Apple deliberately slows down its devices when it pushes out new software updates so people will go buy new hardware. That is a conspiracy theory. There are other reasons why that happens.
The point is, you could argue there’s some lack of alignment, like I’d rather not buy a new device right now. Apple would like me to, but in general, Apple’s interests are best served by giving me the best device, having me have a good experience, because they know if I do, a few years from now, I will come back and buy another one.
The alignment there between the vendor and user is a lot better than it is in those advertising-based business models, where there’s an inherent tension.
No HomePod for the Holidays
Rene: We saw recently, and I covered it in a previous show, that Apple has announced that the HomePod, which they showed off at WWDC, and they very carefully marketed more as a music system than as a home assistant, although it’s controlled by Siri, because there’s no real other way to control…You don’t own a remote control with that.
It is a Siri speaker system, and now it’s being pushed out to early 2018. Apple’s already been accused of being behind. You addressed a little bit of that already, being behind in the home speaker, the home assistant market.
Traditionally, because, two years ago I think, Sundar Pichai got up on stage and said “AI” so often that people just started associating him with the word, which is funny because a lot of us in the industry have seen AI for a long time. Apple started baking it into chips three years ago before it was a trendy thing to do.
They really started to own that narrative and Amazon owned that narrative. This is very easy, I think, for people to look at and say Apple’s going to be even further behind now when they launch HomePod next year.
Jan: Absolutely, and they’re going to miss out on some holiday sales, but the reality is they were going to launch close enough to the holidays that they probably wouldn’t have sold that many. It would have been about like EarPods last year, where they had them, technically, but they were in such short supply, the shipping times quickly went out six weeks that very few people actually got them in time for, let’s say, Christmas last year.
They’re only behind in the sense of the fact that there’s this voice speaker market, but right now that voice speaker market is dominated by relatively low cost, and therefore fairly low quality speakers that are fine for asking questions and playing music at a very basic quality, but are really not high-quality speakers, and that certainly aren’t baked in any way into the Apple ecosystem.
We have, just partly because of my job, and partly because of an interest in technology and gadgets in general, we have a Google Home AirPlay device. I’ve played with various Alexa devices. We have a couple of those in our house right now, too, including the Sonos speaker.
I like those devices in many ways. We use them a lot for setting timers, and we do use them occasionally for listening to music, but we also have an AirPlay speaker that we tend to prefer because the quality’s better.
For somebody who’s largely invested in the Apple ecosystem, it doesn’t matter how good the Amazon Echo devices are, I want to play my Apple Music playlists, and I can’t do that through an Amazon Echo or Google Home device right now. I have to sign up for Spotify or Google Music, and then port my playlists across there.
It’s a lot of hassle, and so at the very basic level, I think the HomePod will serve the need for people who want this kind of device but want it tied into the Apple ecosystem, something that just doesn’t exist today unless you have AirPlay, and that’s sort of indirect because you can’t speak to the speaker, itself.
The secondary part of this is, “OK, what else can you do for me? How can you make this a unique experience? What additional value can you add by the fact that it is tied into the Apple ecosystem, that it majors on audio quality, and so on?”
They’ve done that clever stuff with detecting the room around it, optimizing the audio for it, and so on. If you have two of them, they can work in stereo. There’s a lot of clever stuff that really none of the other speakers out there do yet.
Apple is very deliberately positioning itself in a very different space from what’s out there already. You see Google sort of heading in that direction with their Google Home Max, that they’ve sort of preannounced as well. Amazon hasn’t really gone there, yet. We’ll see if they do go there, eventually. They seem to be focused on cheap, because that serves their broader ecosystem better.
Apple’s going to be in a unique position. Certainly, they’re not going for market share, just as they never have in any other market. They’re going for their specific slice of the market, which is going to be a premium experience, as it generally is. It’s going to be an experience that adds value by being tied into the Apple ecosystem.
It’s not going to sell more than anybody else. It’s going to sell to the people that it’s aimed at. It’s interesting to see that some of the marketing materials on the website for the HomePod have shifted slightly.
Jan: There’s more mentions of home assistant and stuff in there. They clearly started out positioning it primarily as a music player, but are recognizing that it does need to do that stuff, too. The Siri skills can’t just be limited to music. They have to include other apps and other functionalities as well.
Rene: Ironically, Siri kit still doesn’t include anything for music or podcasts, or…
Where’s the Facebook Hub?
Rene: It’s unfortunate.
I kind of look at this thing like what is…I did a bunch of Buddhism when I was in college for my studies, and one of the things that I always liked about it was that there is no truth, there is just essential nature.
If I put this cookie on the table and I say, “Do you promise not to eat it,” you can say yes or no, but none of those are true answers. Based on your past behavior, you’re more or less likely to eat that cookie. You’re just going to be who you are.
I think companies are often like that. Apple wants to increase the value of iPhone. If a device like this can make iPhone more valuable, or help them get more money from somebody who’s already bought an iPhone or whatever Apple equipment that is, they’ll tend to do it.
Google wants to really make the Star Trek computer. They want to acquire all the world’s data so they can slice and dice it, and provide a variety of services around it.
I’m really not sure what Microsoft is doing these days, but Amazon wants to be part of every retail transaction in the world. If they can have a box there that, yes, gives you some services and things, but allows you to buy stuff, or just be part of Amazon, or increase the value of Prime, that’s in their best interest.
The one player I haven’t really seen here, that I thought we would, is Facebook. We haven’t really seen much about a Facebook home hub or home product.
Part of that, I wonder, is Mark Zuckerberg seems to be really – I don’t know what the right word is — he wanted to make a phone. He did all these he could to make a phone, then decided not to make it, and then had a second effort, but that ended up being an HTC product, and then thought about it really hard again, and then once again pulled the plug on it. He didn’t want to get into that.
Is that sort of what we’re seeing with Facebook in this space, that they’re OK being an app-based and web-based platform for now, and they’re really not going to go into hardware?
Jan: That’s a fascinating question, and I think we’ll see the answer to that over the next six to nine months. They created this hardware division. They hired Regina Dugan to run it, who had previously been doing…Well, she started at DARPA and then she went to Google for a while and did that kind of stuff there, sort of advanced hardware projects.
At the developer conference this year, they showed off these crazy human brain computer interfaces and stuff like that. It’s very sort of futuristic.
At the same time, that group has supposedly been working on hardware that’s a lot more sort of here and now. There have been repeated rumors that they’re bringing out some kind of voice speaker, some kind of video conferencing device, potentially as two separate devices.
As you say, Facebook doesn’t have a great history with hardware. Certainly organically, in the phone space, they’ve not been successful at all, and kind of pulled the plug on several other projects there. They did, of course, acquire Oculus.
The reason that they acquired Oculus, and the Oculus Rift of VR is they felt like VR was going to be one of the next big interfaces, and having missed out on a controlling position in smartphones as a sort of a device and interface, they wanted to really be part of the next one, and so that was the stated reason.
If you look at voice as “a” next interface if not “the” next interface, as we kind of talked about earlier, voice speakers are an obvious place to be, a voice assistant is an obvious place to be. The challenge is that Facebook’s never done interfaces before. They haven’t done a lot of the stuff you need to do voice speakers well.
Their business model, as you were kind of suggesting, really doesn’t revolve around hardware. It revolves around advertising and learning about you, and so on. You could argue, it serves them well to have a voice speaker in your house and capture all that additional stuff about you.
I’m just not convinced how well a Facebook speaker or video conferencing device, how well that serves users. I mean, why we would actually buy it from them, rather than from one of the existing players in the market.
I think the next few months are going to be fascinating in terms of whether Facebook does actually bring out that hardware that’s been reported to be working on, how it’s positioned, and whether they seem to have any clue how to actually market something like this to consumers.
Rene: I think those are good points, and that’s why I was interested in Facebook in this space, because exactly what you said in terms of making hardware. Flashback — I don’t know how long it was now, five, seven, maybe even eight years — they hired Tsang away from Android, and he was Andy Rubin’s number two, and they hired Mike Mattis, who designed a lot of the most famous iPhone apps on iOS 1, like the photos and camera apps.
Mark Zuckerberg put his arm around people and gave them the Steve Jobs walk, and said, “Come invent the universe,” and they did absolutely nothing with all those people and all that talent. [laughs]
I was wondering if this would be the same, but the one thing that you mentioned with Oculus, it always occurred to me that if you have Facebook on your phone, you’re just home gesture away from in a different app. If it’s on the Web, you’re just one tab away from being in a different Web. They can be part of your attention, but they can’t own it.
The one thing Facebook always wants is to own attention. One of the best ways of making money in the last 5 years or 10 years, was to make Mark Zuckerberg afraid you were taking attention away. Then he’d buy your Instagram, and he’d buy your WhatsApp, and he did all these things for you, because he needs that attention.
Oculus, it’s not easy to get out of VR space. If you’re in Facebook VR, you have to literally take your head off to get out of that. I was thinking that if they managed to be in your living room or in your house, they may have passive attention rather than active attention, but it still sort of serves their neediness.
Jan: The big question to my mind is whether they can create a platform that’s compelling. That’s been the challenge with phones. It’s like there was no real value in having a “Facebook phone” over having Facebook on your phone. They didn’t really have a platform that was a window to other things. It was just the Facebook experience…
Rene: It was Chat Heads, which was bizarre.
Jan: Yeah. You had these little overlays and things, but it was about it.
They haven’t created that sort of platform. They’re not a platform company in quite the same way that they claim to be. They claim they built a platform, but it’s largely about advertising more than other stuff. That’s not really a true platform in the sense of other people creating real value on top of what you’ve built.
That remains the biggest challenge. They want to have these next-generation user interfaces and own them in a way they never have on the smartphone. But it’s still not clear to me what value Facebook adds over and above its apps.
That’s going to be, I think, the single biggest challenge here, especially when they’re competing with companies like Google, Amazon, Microsoft, Apple, and so on.
Going (world) wide
Rene: To sort of round this out, traditionally, one of the biggest problems I mentioned with Amazon and Alexa was that they were so bound to the US market and to one language. They are slowly improving.
In the beginning, you could say, “Do this for me in my living room,” but if you left the house, you couldn’t just scream back and tell it to stop, whereas Siri was with you everywhere, and even if you traveled, or in a different country, you had a good chance of being able to turn off your lights or something far away.
Siri has its own challenges, and that is it still hasn’t passed the reliability test. In the early days, it had tons of network problems. Even now, you can say, “Turn off my lights and it’ll do it,” or you could say, “Turn off my lights,” and it’ll say, “Sorry, I can’t do that.”
It creates this lack of certainty that I think some people find deeply distressing. It’s unclear how Apple’s going to overcome that hurdle, and yet they have moved it over to other devices, but for example, Mac can’t control Home kit. There’s no parody of features between them.
I’ve been asking for a while. I think Apple really should make a Vice President of Siri Experience, somebody who wakes up in the morning, and their only job is to make sure that Siri is as delightful as the product lead behind iPhone does, when they think about the next iPhone.
I’m not sure there’s a way that Apple can really gain back that sort of confidence, and have people put that amount of trust in Siri, except day-by-day, interaction-by-interaction, and sort of earning it back.
Jan: Earning it back is a great phrase to use, because many people would have had an experience with Siri a few years ago, kind of found it frustrating, and essentially given up on it, and never tried it again since. That’s the challenge is to get people coming back, and trying it again, and realizing, “Oh, it has actually made big strides since then.”
Even now, people are still having frustrating experiences with it. I can be in the exact same spot, making the exact same request, on the exact same device, and get completely different experiences today and tomorrow.
Apple Watch being a great example. I’m frequently either starting a workout or ending a workout. I’m going for bike ride, for example, and I ask Siri to start the workout or to pause it while I stop to have a drink or something. It’s the exact same scenario. One day it’ll go, “Yep,” and the next day, it’ll go, “Sorry, I can’t do that.”
Jan: Or, “You need to do this yourself.” Or, “I’ll tap you when I’m ready,” or whatever. It’s like, “Why is this inconsistent?” So, yeah, there’s still some big frustrations around Siri.
I think that’s where a lot of the reputation and the kind of narrative comes around, where it’s like, “Oh, Alexa works every time.” I say, “Well, Alexa’s on a device that stays in the same spot. It’s connected to a strong WiFi signal in your home with a fast broadband connection behind it. It has these seven microphones that are designed to pick up your voice over far field, and so on.
One of the big questions for me with HomePod is, is the performance of Siri significantly better on there because of those factors? It really should be, but I don’t know whether it is. If it isn’t, then it will really expose that there are some backend issues with Siri that can’t simply be fixed with better hardware.
That kind of goes to your point that if that’s really the case, then they need to get on that. That’s one of the baffling things about Apple always is, you know, one of the wealthiest companies in the world, and yet always seems so resource constrained.
They just seem to decide not to invest in this particular area right now, put their resources elsewhere, put people on other projects, and stuff just doesn’t seem to make meaningful progress. This feels like such an obvious and central area, where they should be making more meaningful progress more quickly.
Rene: Totally, and I think they didn’t really show off the Siri features at WWDC, but from people who have tried them, it sounds like from an ingestion point of view, it really is rock solid. It’s got the microphones. It’s got the ingestion. It can do it all even when there’s a lot of noise around, but it is that surfer thing.
This might be controversial, but a few years ago, Apple made some personnel decisions in terms of where they were going to take the Siri team. That’s why we see a lot of people now at Viv and no longer at Apple.
That was bought by Samsung. Those were brilliant, brilliant people, including the founders of Siri, and a lot of previous people who were working really hard on product development for Siri. I don’t know if they chose well, there. I don’t know if they made the right decision. Maybe they should have gone left instead of right.
That’s sort of the past. Now, famously, they hired the work – oh, I’m blanking – the app that let you do automation, Workflow.
Rene: They hired the Workflow team and they’ve hired some other people. I’m hopeful that infusion of talent will happen, but it really has to be that rock solid, consistent experience. The only advantage they have, is they are assistant one on the iPhone.
You can get Alexa. You can get Google Assistant, but every time Apple releases anything, they have a chance to reintroduce you to Siri.
Jan: Absolutely, and I think that’s the single biggest challenge for Alexa is it’s homebound right now. There are a couple of ways you can use…
Rene: I think there’s like a phone that licenses it.
Jan: Yeah, there’s a couple of phones. Even they’re not great. They’re inconsistent. To your point about Siri, they’re inconsistent with the experience that you have at home in terms of what you can actually do with it.
If it’s not assistant one — and I guess you’re using the sort of analogy of sort of input one on a TV — if it’s not baked in and integrated such that you can use an external hardware button to invoke it, or a command when the screen is locked, it’s kind of useless as an assistant.
That’s going to continue to be Alexa’s biggest challenge, whereas Google and Apple have solved that challenge by being in smartphones already, and now extending into the easier categories to crack.
Rene: It’s so frustrating to me that Amazon couldn’t do it. From a pure hardware point of view, they could not make the Fire Phone a success. In hindsight, the benefit of hindsight, they should have laser focused on making that shop button and Alexa a prime interface, and not cared at all about that weird 3D stuff.
Jan: Yeah. [laughs]
Rene: That, I think, shattered a lot of illusions of Jeff Bezos being a good product guy that many people sort of held close, I think, before then. They’ve had to sort of move around it. I think the home was a good point of entry once it was clear the Fire Phone wasn’t going anywhere.
Jan: I think, arguably, had they waited a couple years and launched the phone now, when people are familiar with Alexa and had that as a central feature, that would have been really fascinating. But all this sort of predated that.
It’s another example of kind of what I was talking about with Facebook. It was clear why Amazon wanted you to buy the phone. It wasn’t clear why you would want to buy the phone. This is going to be the same problem with Facebook’s hardware, I think.
The future of voice assistants
Rene: Last question, wrapping things up. Where do you see this assistant space going over the next couple of years?
Jan: We’ve seen the sort of companies that are in it from a software perspective. It’s kind of obvious that Facebook’s going to at least try to get into it, but other than that, we have Amazon, Google, Apple, and Microsoft already in that space. They’re kind of the main players in Western markets.
Obviously, in China, you have a whole different set of players. There will be some other specific markets, like Russia and potentially India, where you might see some local competitors, but for the most part, you’ve got US players that are going to dominate most of the world. You’ve got Chinese players that are going to be the players there.
Then the question is what happens from a hardware perspective? Alexa’s licensable and the Google Assistant is licensable. You can put those in different devices. Cortana is licensable. We’re just starting to see some devices coming out around that.
The big question is going to be whether those companies end up sacrificing quality as they license these assistants to third party hardware. I’ve looked at the Alexa standards for third-party hardware manufacturers, they’re not as high as the standards that Amazon, itself, insists on with its Echo devices.
My worry is as it makes its way into more devices, the experience is going to be poorer, and it’s going to get a worse reputation over time. That’s a worry. As I say, getting Alexa out of the home, into smartphone in a way that’s really integrated, that’s an ongoing challenge.
I think Siri can be a really strong competitor, especially if we eventually get some lower-cost form of the HomePod for the home, because at the price it’s at, it’s not going to be a great option for everybody.
Rene: Another tangent. One of the things I was wondering is, you can have a HomePod, but Apple can also improve Apple TV, and if they ever get their router act together, have some sort of next-generation mesh network that incorporates…There’s a possibility because Apple makes several devices that they could actually have a mesh assistant with your various mobile and homebound devices all working together.
Jan: Absolutely, there’s lots of interesting potential there. Their sales pitch would obviously be, “Well, if you have an Apple Watch or an iPhone, you can really use the ‘Hey Siri’ command and all the rest of it,” but not all of us have an Apple Watch.
Not all of us always have our phones with us. Especially women, don’t have clothes with pockets, necessarily. They might keep an iPhone in a purse or on a table somewhere.
I talk to my wife, she’s always leaving her phone in different places around the house, and talk to other women who also don’t have their phone with them…
Rene: And we need to fix pockets. [laughs] We need to fix pockets so badly.
Jan: Yeah. [laughs] …ambien assistant, so therefore very useful, for at least for those people that don’t carry a phone around with them all the time, or don’t have an Apple Watch.
There are these categories they need to get into, so it’s going to be a fascinating few years. I think Apple has this user-based lead right now, but based entirely on phones.
The question is, can they make Siri useful in other places as well, and specifically, can they create one of these ambien assistants that can be present in multiple rooms of your home, whether or not you’re carrying your personal device with you, and can they do that in a way that’s really useful. Lots of interesting questions there.
Rene: Best of luck in your future endeavors.
Jan: Thank you.
Rene: Are you still going to be followable on Twitter?
Jan: I am, so I’ll continue to be @jandawson, so J-A-N D-A-W-S-O-N on Twitter. I probably won’t be quite as active on there as I have been in the past, but will certainly be lurking, if nothing else.
Rene: I thank you for the many years of service you’ve given to the industry.
Jan: Thank you very much for having me on one last time.
Rene: Awesome, I really appreciate it.
You can find me @reneritchie on Twitter, Instagram, all the socials. You can email me at email@example.com with comments on this show, ideas for future shows, basically anything you like.