Apple (Nasdaq: AAPL) investors are eagerly anticipating the upcoming 10-year anniversary iPhone 8 due out in September. But Apple will also be launching another device by the end of 2017 that could drive meaningful upside for the stock for years to come.
In December, Apple is planning to launch its HomePod smart home speaker, which will compete with the Amazon.com ( AMZN) Echo and the Alphabet ( GOOG, GOOGL) Google Home. While Apple may be late to the game in the home speaker market, Loup Ventures analyst Gene Munster says Apple is best-positioned to eventually establish a dominant market share.
[See: 10 Great Tech Stocks That Stay Under the Radar.]
Buyers may think of these home devices as high-quality music speakers, but Munster says Apple’s aim is to eventually fully integrate its artificially intelligent Siri virtual assistant into Apple users’ homes and all of their devices. Ultimately, Munster says devices like the HomePod will change the way humans interact with computers by eliminating keyboards, mice and touchscreens. Instead, humans will interact with technology by voice alone, much like they interact with each other. In fact, earlier this year Google reported that 20 percent of mobile queries are already made using voice commands.
Today, Amazon’s family of Echo devices and its Alexa virtual assistant control about 70 percent of the smart speaker market, according to Loup. Google Home controls 24 percent of the market. While Munster says Google’s natural language processing software is best-in-class, Apple’s ecosystem gives it a definitive long-term advantage.
“As the technology improves, which our research suggests can happen quickly, competitors will converge, and the long-term winner will be the product that provides its user with a heightened experience and improved efficiency,” Munster says. “We believe Apple is uniquely positioned to do so, as Apple’s device ecosystem delivers a frictionless experience, which will only get better with the adoption of voice-first computing.”
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Last week, Gartner projected that the global virtual personal assistant-enabled wireless speaker market will grow from $720 million in 2016 to more than $3.5 billion by 2021.
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Apple’s Newest Device May Dominate Its Market originally appeared on usnews.com
