"Siri, will HomePod become a big hit" / Blog company PayOnline / SurprizingFacts

The author of the material analyzes Apple's wireless HomePod column.

It's hard to find someone who does not like music. According to a study conducted in 2014 by Nielsen, 93% of American consumers listen to music. 75% of them do it on the basis of a conscious decision. In the rest of the world, things are probably the same.


It's hard to find a person who does not associate music with the most important moments in his life.

Apple They chose music as a horse that will take out their latest product on the basis of Siri and part-time assassin of Alexa, HomePod.

It seems that the developers of the new home device from Apple did not escape the fact that most users like to ask Alex plays one or the other track almost the same way they listen to music.

Based on the results of a poll conducted last fall by Experian, the respondents of which were early users of Amazon Echo, it turned out that "put me a song" was the most popular team: more than a third of users (34%) asked Alex about it several times a day. Well, the most popular team, if you are curious, "put a timer."

During the launch of HomePod on June 5, Apple CEO Tim Cook described it as a device that would "revolutionize home music", just like this Made in the distant 2001 and 2003 iPod and iTunes in their categories. According to Cook, music is "in Apple's blood." He also added:

"We wanted to create something that would sound incredible. I think that when people hear HomePod, they will be shocked by the sound quality. Of course, he knows a lot of everything else, but, among other things, we wanted to achieve a really high quality of reproduction. "

What innovative approaches did HomePod adopt from iPods and iTunes that invented by Steve Jobs, Johnny Ive and Tony Fadel and who really revolutionized music in the early 2000s?

Let's open this topic in more detail.

Or better, or No way

After talking with Tony Feydel in March on The Innovation Project, the author of the material learned about the origin of the iPod something that she did not know before. Like many of the entrepreneurs she talked to, Feydel drew inspiration from the difficulties he faced personally.

Feydel was a DJ, and DJ's fame, as you know, depends on the tracks that they twist. In the late 90's there was only way to be a cool DJ with cool songs – to buy a car of CD-ROMs, somewhere to store them and drag along with clunky music players for performances. Fadel had his vision of the correct design of a portable music player with a hard drive, where you could store legal copies of music downloaded from the storage and management of music. Portable music players of that time were illusive, cumbersome MP3 players, and Napster was very attractive to many people in the way of being addicted to downloading illegal music obtained by pirate methods.

Feidel shared his idea with Apple, but she did not call for Their enthusiasm, because the company at that time had not yet recovered from the failures of several of its consumer products. Remember Newton? Faydel, however, did not abandon his efforts and was eventually hired by the company in 2001, having received a small team and one year to bring the product to the market.

When the first iPod was introduced in October 2001, he Was perfect, had a hard drive of 5 GB, was, according to analysts, "no thicker than a deck of cards," synchronized with the desktop management system of the Apple music collection – iTunes.

Critics liked its design, but not the price tag in 399

During the next eight weeks after the October Launching and until the end of the year, Apple sold only 25 thousand iPods.

However, soon the reputation of a good consumer product and convincing marketing in the spirit of Apple ensured its success as an elegant portable music player that once drew in his imagination Feydel . Apple sold nearly 600 thousand iPods by early January 2003, significantly pushing the position of all other portable players on the market, including Microsoft Zune.

This success is due to the fact that the company managed to remain faithful to the design- The mantra of Jobs – "if we can not do better, then we should not do it at all."

However, the true revolution took place in 2003 with the release of iTunes. This event will turn the iPod into a device that radically changed not only the consumer's attitude to music, but the entire music industry as a whole.

Previously, if the consumer wanted to listen to the song, he needed to put a lot of money for the whole album, from Which he will only listen to one song (or he could just illegally download it from Napster). Opportunities to buy individual tracks were not. Jobs tried to offer record labels a model in which iTunes was to become a digital commercial platform that allows customers to buy individual tracks, store them and play from their iPods. The labels could monetize the sale of individual tracks that somehow passed them by Napster. Recording companies that at that time were actually selling whole CDs for the sake of one song were not thrilled that in their game an intermediary appears, such as Apple, intercepting individual songs for less than one dollar and putting a cross on everything good, what they Have got used.

Jobs managed to agree with some of them. As a result, in April 2003 iTunes was opened with a library of 200 thousand songs, available for download for less than 0.99 dollars for each. Within a week, the number of downloads exceeded one million, and a new kind of relationship between the consumer and music emerged.

Seven months later, iPod sales grew from 600,000 to 2 million. Two years later, January 2006, Apple has 20 times more – 42 million players. The iTunes digital platform, which opened access to millions of songs, seriously affected the sale of the iPod.

Five years after the launch of the "star duet", in January 2008, Apple reported selling more than 5 billion songs in iTunes. The company also reported the sale or rental of 50 thousand videos. Despite the addition of TV shows and music videos in iTunes in 2005, the purchase or rental of films became available to consumers only in January 2008, when the studios opened access to their content for the platform.

Life in Apple's Digital Media Alley

In early 2013, ten years after the launch of the iPod, according to research firm NPD, Apple's profits were already $ 25 billion, or 69% of all sales of digital music and 29% of the total sold in the iPod USA music. This allows us to call Apple the largest music distributor in the country. The iTunes store also turned out to be a money generator for Apple. In the fourth quarter of 2012, Apple reported a profit of $ 3.7 billion. So much was the general commission of Apple from the sale of all multimedia products in just one quarter. Half a year later, in June 2013, Apple reported that the number of users of its iTunes store is 575 million people.

Apple with its iTunes did with the music stores the same that Amazon did with bookstores – That the need for them was lost.

However, in 2013 there was another trend that for a long time remained unnoticed against the background of iTunes marketing.

The turning point

Digital music plays a giveaway – this was the headline of the Rolling Stone magazine in January 2014. The material was devoted to the results of nielsen's research on music, published a year earlier. According to the information contained in it, sales of digital music fell for the first time in the last decade since the opening of iTunes.

Two reasons were found: the lack of hits consumers were willing to buy and 32% growth in streaming music. The number of downloads of digital songs, according to the report, decreased by 6%.

As Pandora – one of the pioneers in this field, and Spotify – a Swedish company that first introduced the business model of streaming music in 2008 began to gain momentum and Play an increasingly important role in the market. More than half of Internet users in 2013 heard about Pandora, which appeared in 2000, and a third knew about Spotify, which appeared in the US in 2011. About half (Pandora) and a quarter (Spotify) of these consumers reported that they themselves used these services in 2013.

Pandora and Spotify took possession of consumers' love for all popular hits and all their connected devices to the network, creating a new way Access to music at any time and anywhere, where consumers will have such a desire. The idea of ​​these services was to give consumers the freedom to search for new artists and songs and the opportunity to create their own playlists without having to buy and download individual songs for certain devices. According to the idea of ​​the authors, such an approach should increase the popularity (and therefore sale) of artists, while motivating users to come to the service again and again.

If this sounds like something familiar, then it should be so. The desire to make the experience of interaction of consumers with music more personalized – the very approach that was actively promoted among labels and artists is none other than Steve Jobs, back in 2002.

But streaming music needed a business model that stimulated People continue to regularly use the service and guarantee the same regular payments to musicians. This time, Spotify took up the rethinking.

Spotify created a business model in which consumers could search for music and create playlists until they get bored and do it completely free of charge, provided they agree to listen to the advertisement. Listening to advertising between songs is perceived quite naturally, since this practice is familiar to many radio listeners. Consumers could choose one of two options: either free listening with advertising, or buying an ad-free subscription with a monthly payment of $ 10.

In 2013, two years after the launch in the US, Spotify announced that its audience size had reached 24 million people, six of whom decided that they wanted to listen to music without Advertising. This figure grew rapidly: at the end of 2012, 20 million services were used by the service, five of which subscribed.

This was a turning point: we had a new approach to buying music that consumers will use in the near future.

By June 2015, that is, at the very moment when Apple presents Apple Music, the database of active users of Spotify, according to the service, will be 75 million people, 20 of which are paid subscribers.

К January 2017, the eagerly awaited Nielsen report on the state of the music industry revealed The serious crisis of Apple iTunes: the data presented indicate that sales of digital tracks are falling rapidly as tech-savvy consumers are switching to listening to streaming music.

According to the same Nielsen study, by the end of 2016 Year on streaming it was necessary 38% of all consumed audio, that is стриминговая the business model also well itself has shown. A significant (76%) increase in the volume of listening tracks compared with the previous year was enough to compensate for the drop in digital sales. In 2015, the music industry generally showed a 3% growth.

In many respects, it was Apple and the iPhone that provided the much needed support to streaming services, since it was the iPhone that became the most portable devices with which consumers used the services. Apple realized that the clouds are gathering, but it's too late. In June 2014, the company acquired the Beats headset brand for $ 3 billion, and with it a base of 250,000 subscribers to the streaming radio service, but this countermeasure did not yield tangible results.

What will happen next?

When Apple recently introduced the voice HomePod to the world, Apple called the number of Apple Music subscribers – 27 million people.

Four months earlier, in March 2017, Spotify reported that its paid user base had grown to 50 million. That the ratio of paid and free users remains approximately at the same level, it turns out that the base of free users has grown to 200 million people.

In April, Amazon introduced its latest in the Echo-devices line – the Look. The Look allows its users to get high-quality photographs of fitting things and get advice from professional stylists recommending the most successful ones. And of course, the built-in support for Alex allows you to find and order with his help the right things. According to some reports, Echo-devices are already used by 10 million consumers. All of them ask Alex to play music, including music from their playlists in Spotify.

As for Apple and its HomePod, it looks as if the giant from Cupertino is trying to sell premium-class iron In the hope that there will be enough fastidious music lovers with thick wallets that put the sound quality above all, and not, let's say, access to an intelligent voice assistant, including one who can play music from the Spotify playlist. Yes, Tim Cook said about HomePod that he "of course, knows a lot of everything else", but today it sounds about as if we were discussing Amazon Echo 2014-2015 and its basic features, such as pronouncing out loud the results of sports matches, news , A weather forecast, a list of restaurants close to the house or just a timer setting.

However, something HomePod is clearly lacking, at least for now, is the voice control of music from Apple Music, which would differ significantly from the available ones Today analogs, including exclusive Access to the catalog of compositions of Taylor Swift. Miss Swift recently hit the headlines, breaking her exclusive deal with Apple Music and returning to working with Spotify, a platform that she scornfully scorned because of the free advertising model of the latter. Someone will say that this event happened just before the release of Katy Perry's new album on Spotify, however, even if this is so, that such a step clearly reflects the anxiety of being forgotten, while retaining exclusive relations with the streaming service, whose audience size is 8 times Less than Spotify.

Amazon and his Alex, on the other hand, create a platform and voice ecosystem that can meet the needs of commerce. The company attracts consumers to this ecosystem with the help of a line of various devices divorcing access to it. The voice assistant, whose support is built into all these devices, has 12 thousand different voice control skills created by a strong community of developers. With the help of these skills, consumers can listen to music from streaming service, learn news and weather forecast, buy things in 1 click with Amazon. Yes, the Echo audio system does not have 4-inch tweeters and 12 high-frequency beamformers that HomePod boasts, but it also does not make its users forget with love the Spotify playlists made before and start all over again with Apple Music, listening to the music on the device,

Analysts believe that the dynamics of the development of Alex and Echo will allow the Amazon business to grow to the value of $ 10 billion in the next 2.5 years, the advantage is that it can be used only at home and without any additional functionality.

In many respects, Apple and the announcement of HomePod are quite natural and understandable.

Apple needs HomePod to become a hit, despite its huge market capitalization, Huge cash reserves and statements about the sales of software and services. More than 60% of the company's sales and revenues are provided with hardware products, and investors have long been accustomed to streaming innovative devices that appear biennially and can meet the need for increased business profitability.

And here the company faces various challenges.

iPhone sales around the world are gradually falling, competitors' shares are growing. Some analysts have expressed concern that the hotly anticipated iPhone 8 does not look attractive enough to push sales and keep them at a high level in the long term. In the meantime, Samsung Galaxy 8 has made the iPhone a serious competition not only in the US, but around the world. Все эти события совпали по времени с удлинением цикла обновления iPhone и iPad по всему миру, в том числе и в Китае, где бизнес Apple упал на 14% в прошлом квартале.

Продажи ПО и услуг хоть и имеют очень высокую маржу, представляют лишь около 11% всех продаж Apple, но даже в этой области истории успеха стали редки. Почти все независимые от App Store и iTunes программы и сервисы, представленные компанией — iBooks, Apple News, Apple Music and Apple Pay — не показали сколько-нибудь впечатляющих результатов. Что же касается iTunes, то для него, как уже говорилось выше, наступили непростые времена. Новые устройства, представленные Apple в попытке стимулировать продажи путем привлечения разработчиков, такие как Apple Watch, потерпели неудачу, поскольку им не удалось привлечь потребителей. В начале мая Google, Amazon и eBay объявили об удалении своих приложений для Apple Watch из AppStore.

Великий немецкий философ XIX века Фридрих Ницше, как-то сказал: «Без музыки жизнь была бы ошибкой».

Будущее покажет, станет ли ставка на девайс, играющий треки только из Apple Music, музыкальной ошибкой Apple в эпоху универсальных устройств, открытых экосистем, комьюнити разработчиков, развитых конкурентов с большой долей рынка.

Автор материала предполагает, что общее у iPod и HomePod только окончание.

iPod решил проблему потребителей музыкальной отрасли в 2001 и 2003 годах, тем самым совершив революцию в музыке, попутно обеспечив своих создателей огромными продажами девайсов и цифровых продуктов.

В 2011 году Spotify увидел зарождающуюся в эпоху сетевых девайсов и мобильных технологий возможность изменить подход к прослушиванию и продаже музыки, разработав новую, не зависящую от отдельных девайсов и ставшую популярной бизнес-модель.

В 2014 году Amazon посчитала, что будущее за голосовым управлением, и начала работу над созданием платформы для разработчиков, раз вития навыков и привлечения потребителей, разработками которой можно пользоваться на любом устройстве, включая автомобили и iPhone. Бизнес-модель Amazon ориентирована не на устройства, а на коммерческие процессы, которые лежат в основе их продаж.

Поиск проблемы потребителя и ее решение — та самая причина, по которой iPod прославился на весь мир шестнадцать лет тому назад. Сегодня же, в 2017 году, HomePod, по мнению автора материала, выглядит скорее как девайс, пытающийся решить проблему Apple — ее потребность в очередном «железном хите» — и только.


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