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MarketWatch First Take: Apple will need to make HomePod worth waiting for after delayed launch

November 18
16:04 2017

Apple Inc.’s delay of its HomePod is a gamble that its most ardent consumers will wait to buy its version of a voice assistant after the holidays, while it also risks losing some incremental sales.

The news also raises questions about whether the delay is due to a hardware or a software problem. Apple did not explain the exact reason in its statement to the Verge, saying only that it “needed a little more time before it’s ready for our consumers.” Apple has recently had several product manufacturing issues, including the iPhone X, which came out later than its standard autumn launch. The device will use Siri, its inconsistent personal assistant that is part of the iOS.

Apple clearly did not feel its product was ready for prime time, a move that was heralded by some like analyst Patrick Moorhead of Moor Insights & Strategy, who tweeted that he would rather have a perfected one, rather than an unfinished one.

Indeed, Apple’s AAPL, -0.56%  most serious fans are likely to wait for its take on the home assistant, a technology that first became commercially successful after Amazon’s launch of its Echo in mid-2015, with its own voice controlled assistant, Alexa. That strategy that has worked well for Apple in the past, which described the HomePod at its June launch as a higher-end device that would “reinvent music in the home.”

“We believe most of the Apple faithful will wait for the product as the halo effect speaks to a cohesive product family which is Cupertino’s core DNA,” said Daniel Ives, an analyst with GBH Insights. “The Apple network effect forces customers to wait for products such as these which is why timing, while not ideal here, is not a back breaker for the HomePod in our opinion.” Ives said he was not overly concerned about the HomePod, as he believed it would have been a negligible amount of revenue for holiday season. “The growth and stock all come down to iPhone X with everything else essentially background noise for the next 3 to 6 months,” he said in an email.

Still, the delay puts Apple further behind rivals Amazon.com AMZN, -0.65%  and Alphabet’s GOOG, -1.30%  Google Home in the fast-growing arena of voice assistants, which can become a Trojan horse for these companies to learn more about their customers purchasing, viewing, listening habits and their contacts. Google wants to serve up more appropriate ads to its users and Amazon wants to sell more items. Other companies are also trying to get into the game.

Whether Apple’s delay is a good or bad move will ultimately depend on the release of the HomePod itself. Apple needs to take the technology further than its rivals and prove that it was worth the wait.

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