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Will HomePod be Apple’s Smart Home Hub?

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It’s always fun to see what new things Apple announced at WWDC.  After some thought and discussion time to process Apple’s WWDC 2017 Keynote, rather than focus on the AR demo (which I also think is the seed for some future disruption) I’ve been thinking about IoT and the smart home segment of IoT.  One question remains to be answered for me, will the HomePod be Apple’s smart home hub?

Apple is playing catch up in this area and is obviously feeling the pressure if they are announcing a new product 6 months before availability, something that is very anti-Appleesque.  Though one could argue that this is natural evolution for their product announcements since they all expand the Apple Ecosystem and you need to have developers connecting to the new device before they ship (especially when Amazon’s Echo has over 10,000 skills already). Every time they do this the hope fades a bit more within the Apple fan base around Apple every surprising us again with a killer new technology innovation, but that’s a whole nother rabbit hole to go down.

So when playing catch up, it’s not surprising that Apple would play to their strengths…music. The HomePod was introduced as a reimagined way to do music within the home (we should all be getting good at seeing thru the marketing rhetoric by now).  It’s initial specs look like a great home speaker and integrated with Apple Music gives you more options than time in your life to listen to.  And at the end there was an almost passing remark about the HomePod being part of the HomeKit.  The HomePod page even mentions “it’s a hub for controlling your smart home accessories”.  But, the current specs don’t talk about any local area communications, no Bluetooth, no Z-Wave, no zigbee.

Would Apple jump on the Z-Wave or zigbee bandwagons to quickly expand the Smart Home options and have their HomePod also become one of the core SmartHome bridges?  Again, not very Appleesque. But I would expect to at least have seen bluetooth on the HomePod so all those HomeKit devices that use bluetooth and the AppleTV as their hub would have another way to enter the Apple Ecosystem.  It just makes sense to use the HomePod’s processing power to also control and bridge the smart home to Siri and the Apple Ecosystem, but that is being seen as a side feature to the speaker.  I’m expecting (or hoping) that bluetooth appears in the specs before the HomePod is shipped in 6 months.  And it will be interesting to see what home kit integrations we see when the HomePod final ships.

What this shows is how IoT is an enabling technology but not something that most consumers think about buying directly.  Consumers especially are spending discretionary budget on things they enjoy…like Music.  And the ecosystem power is in pulling the consumer into this larger thing than just music without them realizing it.  So again, while Apple may be late to the home speaker market, they have created something that consumers will understand the need for immediately and purchase.  Compare that to the immediate thought many of us had when the Amazon Echo appears…”why do I need that anyway?”.  I think the HomePod will quickly catching up to Amazon’s Echo in shipments and help push the smarts into the home faster without people realizing it.

Other Reality of the Apple Dividend & Buy Back Announcement

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So the big Apple divident announcement hit this morning. And all the news media (including a few financial sites I’ve looked at) seem to be focusing on the wrong numbers.

As the first sentence in their announcement states: spending $45 Billion (of domestic cash…2 key words there) over 3 Years; averaging out to $3.75B per quarter. $10B of that will be to repurchase shares to negate employee stock grants (aka, dilution of public stock); averaging $.8B ($833M specifically) per quarter. If you take the repurchase program out of the equation (it’s just negating new stocking coming into the open market that’s pay for all the Apple employee’s new cars, home remodels, and kid’s college savings programs) you have just under $3 Billion of Apple’s quarterly cash hoard being returned to investors.

Now the part not being focused on in most media circles: In their 1st Quarter of FY2012 Apple Generated $16B in cash. That number is expected to grow each quarter with a FY2012 total expected to be $75B. So the dividend pay out will only slow the rate of Apple’s cash growth (in FY12Q1 they would have generated $13B instead of $16B; the FY2012 total slips from expected $75B to an estimated $63B).  Most of Apple’s competitors still wish they could generate that much revenue, not just free cash.

The other small caveat being missed. The payouts come from domestic cash. Of Apple’s near $100B cash balance, about $64B of that is overseas. Not taxed by the US Government.

So the Dividend payout is great for investors as our growth stock now is also an income stock as well. It’s great for Apple because it attracts a new class of institutional investment money (income seeking) but it also allows Apple to continue to shift cash into overseas accounts. I’m not a corporate tax expert but it would be nice if a news agency would focus on the impact of this small tid bit.

(Disclaimer: I’m an Apple stockholder)

iPad For Consumers

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Lounging on the Couch with iPad and Dog
Lounging on the Couch with iPad and Dog

Part 3 of my iPad (32GB, WIFI, iPhone OS 3.2) review:

(9/29 Update: Parental preparation and then adaptation has kept me from finishing this series on the iPad.  Once home life stabilizes in a few months I may try to wrap it up in some fashion…)

It is no secrete that Apple produces products for consumers (Steve Job indirectly admits this in the first paragraph of his Thoughts on Flash letter).  And the iPad is a wonderful consumer based computing platform.

Notice I didn’t say computer but rather computing platform.  It’s different enough from your current desktop/laptop that you can’t really compare the two (though we try because this is our current point of reference).   For the consumer, the person who primarily needs or wants to consume information/entertainment, the iPad is a great platform in which to do it.

It fits in your hands, you use your hands to interact with it, and applications are only starting to take advantage of the user interface.  It truly makes the information on the Internet more personable to you.  Each week there are more iPad specific information consumption applications that become available.  Whether your reading email or a book, browsing the web or the current news, watching a movie or a streamed TV show the iPad makes consuming content more enjoyable.

The iPad is an application platform, which means that the best way to consume content on it is through applications that take advantage of it’s unique capabilities.  Luckily, for content providers, these applications essentially pull data from their existing websites and just display it in a new, more personal, context of the iPad application.  So all a company like ABC, BBC, NPR, or the Wall Street Journal needs to do is build an App that talks to their existing websites.

This is why the issue of Flash not running within the iPad’s web browser becomes a less important topic.  Viewing content through the existing web sites of these content providers gives the consumer a less than optimal viewing experience on the iPad.  Most websites aren’t designed to truly take advantage of the iPad’s unique interface.  Over time they may eventually be able to take advantage of the interface, but not yet.  While supporting flash would give the iPad users more content options, Apple would rather have those content providers build an App for their content.  That’s the trick of any new platform, they only become successful if the platform provider can convince, or force through fear of lost potential market of consumers, others to build on top of it.

The fact that the interface is intuitive and hands on makes a more ideal platform for new or hesitant computer users…like elderly parents.  The self-contained nature of the iPad means less plugs and wires to go wrong and confuse a less savvy user.  I’ve heard of many iPad users who let their parents use it and had a hard time getting it back.  I honestly think that my mother, who currently doesn’t use the computer at all, would actually use the iPad (next time I’m home for a visit we’ll find out…).

The only downside to the iPad for consumers is that need for a another computer to activate and backup the device.  This should really be an optional step for syncing media to the device only.  If this was the case, I think there would be more people possibly using the iPad as their only computer…like my Parents.

A case for the iPad is a must.  After using my iPad for 3 weeks without a case, I finally got my back ordered Apple iPad Case and it makes a huge difference.  The ability to stand the iPad upright to watch a video or to prop it more upright in your lap is a must.  The non-slip surface also helps keep the iPad in the right spot on our lap for the most comfortable use, not to mention protects the iPad.  I recently also came across the Moleskine inspired DodoCase which I found really appealing.  The hand made DodoCase is made like a book and contains all natural materials to encase the iPad in a cover that looks more like a journal than. It was either my penchant for Moleskine journals or the thought of wrapping my high tech iPad in all natural materials that made me order one.  Check back in 4-6 weeks for a review.