Financially speaking, Apple is on a high. So on face value, you’d think that marketers should be thinking hard about how its next-generation user-interface, the voice assistant Siri, could help it innovate. But I’m urging caution.
There’s no dispute that Apple’s second-quarter results were financially impressive with revenues up 16% year-on-year to over $61 billion, and it deserves great credit for that. However, with over 60% of the company’s revenues tied to sales of the iPhone, Apple needs to come up with something revolutionary to create new revenue streams outside a smartphone market that is increasingly competitive. And here it is lacking.
That’s why the distinct lack of attention on Apple’s ailing Homepod was of significant interest. Statista/Gartner for home speakers to be worth around $2bn within the next two years and closer to $21bn when you factor in spend on home automation peripherals (smart lightbulbs, sensors, switches, etc).
Not huge in terms of Apple’s revenues but that doesn’t include the impact and value of voice searches across the billions of voice enabled smartphones. Comscore predicts that 50% of all searches will be done via voice within the next three years so this is an area that Apple needs to start to perform well in. Voice shopping has been , according to OC&C. It’s a growth market for sure: and right now it is a long way behind the rest of the field.
Part of the problem is that, whilst the Homepod is a great speaker, it’s let down by Apple’s aggressive policy of locking everyone into the Apple ecosystem. Because of a lack of Bluetooth support, you can’t use a Homepod if you don’t have an iPhone which locks out 65% of the market in the UK alone. Siri is a dreadfully limited virtual assistant compared to Google Assistant, Alexa and even Microsoft’s Cortana. A major use-case for these devices is voice controlled audio streaming and that only works on the Homepod if you have an Apple Music subscription. Whilst Apple probably doesn’t care all that much at the moment, even for diehard Apple fans that’s probably a step too far.
But market share is vitally important in a world that is about to be changed dramatically by the impact of voice search. Brands will need to be on top of what we call voice assistant optimisation (VAO) over search engine optimisation (SEO): a vital new discipline essential for any digital marketer and media agency. As we move away from a world dominated by paid ads and multiple natural results towards a single search result that might not even be delivered on a screen, brands getting ahead of the curve in understanding these next-generation UIs / AI assistants (and how they are related to the technology like Amazon Echo and Google Home) will carry huge competitive advantage.
So who to back? Google starts from a position of strength: voice is built into the browser the whole world uses and it understands search like no other. Like Microsoft it has an opportunity to perform well in the business market given its email and calendar capabilities. And it further upped the ante at Google I/O the other week, with the announcement of the "Duplex" feature for Google Assistant that showed capabilities for a very human-like interaction when making automated bookings with companies on your behalf.
As for Amazon, Alexa is still leading the way in the home, built on the appeal of Echo, its integration of Prime, its strength in ecommerce and its bold move into home entertainment.
Cortana also works really well and Microsoft CEO Satya Nadella’s policy of a far more open and interconnected Microsoft may pay off. With Microsoft’s core products and services available across a wide range of platforms and its partnership with Amazon to closely integrate Cortana and Alexa it could be a major player. Combine that with Microsoft’s strength in the business world and it could dominate personal assistants at work.
Yet Siri and the Homepod, like with Safari, Maps, Apple Music and many of Apple’s post iPhone ventures - lag a long way behind.
My advice is… watch Alexa and Google like a hawk, keep an eye on Cortana and keep Siri on the back-burner. Rather than focus on specific AI assistants and voice technology in a silo, brands should also be developing an integrated strategy for voice search and the use of voice assistants and voice-enabled devices (both for internal uses and for customers), thinking hard about how that experience integrates into the wider customer journey and how the technology can be redeployed across multiple voice technologies.
Apple either needs to double down on its investment in Siri to play catch up or throw in the towel and open up to its rivals like Google, Amazon and Microsoft to keep its hardware competitive: with over 60% of its revenues still dependent on the decade-old iPhone, can it afford to slip further behind? That’s a big decision for it to make - and current form would suggest opening up the big Apple is not going to be on the agenda. So for that reason, marketers should wait and see before asking Siri.
James Cannings is a co-founder of UX, design & build agency MMT Digital, part of the Be Heard Group