Why did Apple make a new HomePod?

Plus it's tech earnings time and the AI-text robots are having a moment.

Be sure to also check out the latest episode of the Undigital Podcast, where Jess and I talk about ChatGPT, the latest controversy with AI-generated articles, and whether Microsoft’s deal with OpenAI is Google’s worst nightmare. Find the episode wherever you listen to podcasts:

Apple Podcasts / Spotify / Overcast

---

Why did Apple make a new HomePod?

The new HomePod is strange. It sounds great, which is what you would expect from a HomePod. And, if you’re fully into Apple’s ecosystem, there is no easier way to get great sound out of your iPhone or Apple TV, for example.

I feel like it’s important to say up front that—like the previous version—the HomePod sounds very good. I would argue it sounds better than anything else in this form factor, and probably anything else at this price.

I’d even go so far as to say that if you’re not installing a full home theater sound system, the only thing that sounds better than a new HomePod is a stereo pair of new HomePods (and you do need two new ones—you can’t pair an old and a new, or a new with a mini). The problem is, the HomePod is still very expensive.

Apple dropped the price by $50 compared with the original, but at $299, it’s not exactly the kind of thing you buy to put in every room of your house. And, if you are going to buy two of them to use as a simple home theater set up, you’re going to spend at least $600 for the HomePods. At that price, there are a lot of soundbar options available that sound really good. That said, Apple’s price drop means that you’ll be able to score one from Amazon or Best Buy on sale for $249, a price that makes the HomePod almost a good buy.

What’s really strange is that the HomePod is essentially the exact same product it was when Apple discontinued the original. Well, sort of. It does the same things, looks the same, and sounds pretty much the same.

The reason it’s strange is that almost none of the internal parts are the same. Apple redesigned everything from the display to the processor to the woofer to the magnets to the color (of the dark one). It’s an almost entirely new design that essentially looks and behaves exactly the same.

There are some benefits to this. I mean, the HomePod design is beautiful. It’s a speaker you’re not going to mind sitting on a table, or under your television. It also sounds very good, and the new model sounds as good, if not better.

I also noticed that, compared with the original, the new model is better able to hear me when I talk to Siri. That doesn’t mean Siri has gotten better, she really hasn’t. It does mean, at least, that the limiting factor is no longer the HomePod.

Also, the updated components should mean that the new HomePod won’t just stop working as often as the original. I know plenty of people who loved their original HomePod up until the moment it suffered an early and unexplained end of its life.

Why make a new one?

The question I can’t figure out the answer to is ‘why did Apple make a new one?’ The conventional wisdom has been that not enough people bought the original version, which is why it was discontinued. Then, Apple rolled out the HomePod mini at a far lower price point.

The mini obviously included compromises. It’s a lot smaller and doesn’t sound nearly as good, but it was more affordable. It also sounds better than just about anything from Google or Amazon for less than $100.

I mean, the obvious reason is that the company decided there was a spot in the lineup for something bigger, and figured it should at least make it a better product before selling it again. That’s mostly what has happened here. Don’t think of it as a new model, think of it as a less flawed version of the original.

Also, I can’t help but think that the reason Apple put the work into the HomePod is because it actually does care about providing a smart home alternative to Alexa and Google. More specifically, it cares about Siri, Apple’s smart assistant.

There are now more than 2 billion Siri devices in the world—according to Apple’s most recent earnings call—almost all of them iPhones. The problem was that if you wanted anything else in your home that worked with Siri, you were limited to a low-end speaker. If, however, you wanted something that could pass for a home theater system, Apple had nothing for you.

Bringing back the HomePod seems like someone at Apple said “we have to have something in this spot, so let’s go with the thing that we already know works, we’ll just make it a little better.” It is, in fact, very good. It is also a little better than the model it replaces.

Should you buy one? That’s tough. If you already have a first-generation HomePod and it’s still doing its job, probably not. It’s not enough of an improvement to justify replacing one that works. If you wish you had bought an original HomePod while they were available, you’ll definitely be happy with the new version, especially at a slightly lower price.

ChatGPT, Microsoft, and Google’s Worst Nightmare

I’m sure you’ve heard of ChatGPT, the AI-powered text generator. It’s been in the news a bit lately. First, there’s the fact that more than a million people are using it, mostly as a form of entertainment, maybe?

If you haven’t used it, it’s pretty simple. You just type a command and it generates a text-based response. For example, here’s what happens when I asked it to give me a song about how cold it is in Michigan, in the style of Bob Dylan.

It’s also been in the news because Microsoft announced a $10 billion partnership with OpenAI, and plans to incorporate it into both its cloud computing platform, Azure, and Bing. Yes, Bing—the search engine—is still a thing.

I guess one thing worth mentioning up front is that ChatGPT, and any similar type of artificial intelligence-powered chatbot, isn’t actually intelligent. It doesn’t know anything. Instead, it’s a language model that looks at whatever text you right and predicts what the most likely words are as a response.

That’s a dramatic oversimplification, but the point is that it has no sense of accuracy. It’s not concerned with giving you the right answer, but only with confidently giving you a response that “makes sense,” based on whatever you asked.

You can see why that might be a problem. Especially considering more than a million people have started using ChatGPT, and the company behind it, OpenAI, plans to offer a paid version starting at $20 per month.

It’s also a problem for a company like Google. It’s not like Google doesn’t have AI tools of its own, it’s just that they are very frequently wrong. You can see why that would be a huge problem for a company whose entire brand is built on being a reliable source of information.

Microsoft, on the other hand, isn’t dominant in search, and Bing represents a rounding error in terms of the revenue it generates for the company. That’s why Microsoft can afford to be more aggressive and take a risk. It has far less of its reputation at stake.

Apple’s iPhone slowdown hurt earnings

Apple announced earnings yesterday, and it was the iPhone-maker’s most disappointing quarter in a while. Revenue was lower, mostly weighed down by the iPhone and the Mac. The iPad, on the other hand, had a strong quarter probably due to the new base model iPad, which now starts at a higher $449 price point.

As I mentioned earlier, Apple said it now has more than 2 billion active devices. That explains why the company is continuing to shift to services: that’s a lot of devices to which Apple can sell apps and subscriptions. Every time it does, it takes a cut. It’s not surprising that the company posted a record number for its Services division.

Here’s a breakdown of the numbers:

•  Revenue: $117.15 billion (down 5.49% year-over-year) 

•  iPhone revenue: $65.78 billion (down 8.17% year-over-year)

•  Mac revenue: $7.74 billion (down 28.66% year-over-year) 

•  iPad revenue: $9.40 billion (up 29.66% year-over-year) 

•  Other Products revenue: $13.48 billion (down 8.3% year-over-year) 

•  Services revenue: $20.77 billion (up 6.4% year-over-year)

•  Gross margin: 42.96%