Apple trades trendsetting for financial savvy in HomePod: opinion

Apple Inc's HomePod, the company's first new device category since its smart watch, hit store shelves on Feb 9. I doubt it will set the world on fire, but I've come around to a different way of thinking about the speaker and Apple's business. 

The HomePod is a stroke of financial genius, but it also shows Apple's lack of technology innovation. That epitomises the company right now: It's adept at product extensions and pricing strategies to keep pushing up sales and profit even though it no longer sets technology trends. 

I'll focus first on what HomePod is not. I have been surprised that Apple's biggest selling point for the device is audio quality. After all, Steve Jobs didn't trumpet how crisp songs sounded on the original iPod, or how the iPhone had a better digital Rolodex than the Palm Pilot. The company wasn't trying to make better versions of the MP3 players and mobile phones that came before. The iPod and iPhone were fresh ways to approach computing, and those products reshaped the technology industry. 

The HomePod won't do that. From the initial reviews, it seems Apple fulfils its promise to make a high-quality speaker for streaming music. In short, it's a great piece of consumer electronics. But it is not a reimagination of how people interact with computers – Amazon already did that with its Alexa voice-controlled Echo devices. Yes, Apple has Siri, but that's not the focus of HomePod in its current form. If anything, the HomePod highlights all the ways Siri falls short. 

If Apple is not exactly innovating with this device, it is doing something that savvy and relatively mature companies do: Coming up with ways to extend its main product. The HomePod, Apple Watch and services like Apple Music and iCloud are add-ons to the iPhone. People can buy a HomePod or Apple Music if they don't own an Apple smartphone, but it's unlikely. 

The HomePod actually gives Apple two shots at fresh revenue. The first is from the sale of the high-margin device and the second from selling subscriptions to Apple Music. It's clear that the HomePod won't be useful for playing music from anyplace other than Apple's own digital music products. (This would also be a good time to ask about those iBundles.) 

Ultimately, I suspect the HomePod will have the same level of success as that prior iPhone product extension, the Apple Watch. The company may not sell hundreds of millions of them, and entire businesses may not be built on the platform, but it nevertheless will be a big business that boosts revenue and profits. 

That is especially important now that Apple is finding it tougher to squeeze growth from its iPhone franchise and relying on price increases rather than unit growth. Like the Watch, the HomePod also gives iPhone owners more reasons not to defect to competing products.  

Those iPhone franchise add-ons are becoming increasingly important to pad Apple's growth. In the last 12 months, nearly 45% of Apple's revenue growth came from its Internet services including Apple Music and iCloud, and from its “other” products including the Watch and AirPods wireless headphones. 

Apple is becoming a wily, middle-aged company that's less financially dependent on tech breakthroughs. It's not exciting, but it makes Apple a juggernaut of a different sort. — Bloomberg