Bull Session

The Smart Home Face Off

October 12, 2017          

Episode Summary

For our podcast topic this week, we discuss product innovation for the smart home and whether Amazon is overtaking Apple when it comes to creating category disruption. Of course, Apple has a long history of disrupting categories — from the personal computer with the Apple II and again with the iMac; to music with the iPod; to mobile with the iPhone; to the tablet with the iPad. But it looks like Amazon is well positioned to be a dominant player when it comes to the smart home, with their television, music, ecommerce, and other systems all driven by the Alexa voice UI. Amazon’s new hardware products, announced at the end of September, extend the Echo line in significant ways, with industrial design reminiscent of Apple’s groundbreaking work on the personal computer. Is designing hardware and software for a complex ecosystem like the home, fundamentally different from other kinds of consumer product design? Join us as we discuss.

Resources:
Amazon announced a bunch of new hardware products today — here’s a rundown
Amazon’s New Devices Take On Apple in the Fight to Run Our Homes

Jon:
This is The Digital Life, episode 228 in three, two, one. Welcome to episode 228 of The Digital Life, a show about our insights into the future of design and technology. I’m your host, Jon Follett, and with me is founder and co-host, Dirk Knemeyer.

Dirk:
Greetings, listeners.

Jon:
For our podcast topic this week, we’re going to discuss product innovation for the smart home and whether Amazon is overtaking Apple when it comes to creating category disruption. We all know that Apple has this tremendous history of disruptive product innovation and design, and they’ve created new categories. They’ve sort of splintered categories all the way, even starting back with the personal computer, the Apple II, of course we remember, Dirk, as pretty revolutionary.

Dirk:
Mm-hmm (affirmative).

Jon:
They did that again, actually, with the iMac, sort of the first computer that anybody actually wanted to look at or have in their home. And changing the music industry forever with the iPod. We’ve talked at length about the changes that came to the world as a result of the iPhone, of course, with mobile. And then another category creator, the tablet category really just didn’t exist before Apple’s iPad. It did in smaller rudimentary and or industry-specific applications, but nothing like what happened after the iPad.

So there’s Apple’s tremendous history of category innovation and disruption in a nutshell. But we know where they’ve been, and what founder and visionary Steve Jobs was able to do. We’re seeing a shift now in the product categories that are being defined around the smart home, and Apple’s a different company now. It’s got a different sort of mission, being the most valuable company in the world. And I’ve noticed of late, I’ve been excited about some of the things that Amazon has been doing around the smart phone, which of course is the next battlefield for consumer tech.

The smart home has all sorts of things we can automate, all sorts of entertainment, HVAC, television, all kinds of audio. So this is where consumer product innovation is focusing right now, and you see lots of players there, and I know Apple wants it to be in that space, but I am somewhat unimpressed with what they’re doing there. And Amazon, just two weeks ago, had this big rollout of their Echo product line, the next generation of that, and they had a slew of stuff. I wouldn’t say that everything grabs me, or maybe say, “Hey, I really want that.” But some of the Echo offerings were quite beautiful. The industrial design was what reminded me of Apple’s industrial design, frankly, of the kind of, “oh, I really want to buy that ’cause it looks really cool” feeling.

That somewhat rambling preamble, Dirk … What’s your take on this? How are you seeing Amazon and Apple change positions over time as product innovators?

Dirk:
Yeah, and we’ve talked about this a lot over the years, right? I think four years ago, I said Apple’s toast. Apple’s days of being the design innovation leader are done. And the question then was, who is going to emerge to be the next? Is it going to be Google? Is it going to be Amazon? Facebook? Microsoft? Those are all companies that we’ve talked about over the years.

Amazon did have their event, and I don’t think it’s Amazon. I don’t think anybody has stepped into those shoes yet. The role that Apple filled from when the … God, there’s been so many devices and evolutions over the years. From the iPod, or we might even say the candy colored iMacs and that generation of devices, which started Apple shooting back up the design innovation leadership scale, from that point forward until the death of Steve Jobs, they ascended to and became the clear leader. And in that process, they had a handful of what I’ll say are … revolutionary is too frothy, but really important things. I mean, the iPhone being the pinnacle of it, but the iPod, the iPad, and at smaller levels, other products.

Again, we talked before on the show, and it’s been some years, so maybe our listeners now aren’t going to remember it, about one of the most magical, for me, was the … What are the names, they all blend together? The Air. The teeniest of the laptop.

Jon:
Right.

Dirk:
When Steve had a presentation, he had a little manila folder that he was walking around with, and somebody reaches in and pulls out the computer, right? Just this totally magical moment. That was just sort of a smaller machine, but it was still an example of both from a product perspective but also from a presentation and marketing perspective, that Apple was playing a completely different game than the rest of the market.

At this point, Apple probably isn’t worse. It probably is a little worse, but it’s in this pack with Google and Microsoft and Amazon and Facebook, and nobody’s going back to that old Apple vanguard leadership model. I think Apple’s probably the least likely of them to do so. Just showing zero innovation in the past six or seven years now since Steve passed. Five years, maybe, 2012.

To me, to get to the more timely issue, what we saw out of Amazon was nothing of the level of the old Apple stuff. It’s certainly ahead of where Apple is now, as Apple has their events and they released a lot of me too, mediocre groan-worthy crap and try and treat it like it’s another iPhone. Amazon has moved past that mark, but they aren’t anywhere near, from my perspective of asserting that mantle of leadership that Apple wore for more than a decade, and to me, it’s still unclear who’s going to emerge. Maybe we could say Amazon’s the favorite now, but Google and Facebook both in different ways from different perspective have the possibility to do that. So Amazon, they announced some good products, some interesting things, but my heart isn’t racing yet.

Jon:
Yeah. I think … So, I’ve thought a little bit about Amazon’s foray into the smart home, and I think there is a difference in approaches to design between the way Amazon is tackling this versus Apple’s category-busting products. And the reason may very well be because the smart home is sort of undefined. It’s going to be different for each family, each person. It’s an ecosystem of products, so it’s a lot of different things that need to work together, a lot of services, a lot of different kinds of hardware. So it’s not quite as neat a package as we had with, say, the iPad or the iPhone. It’s this interconnected ecosystem of stuff, and because of that, I think Amazon is doing lots of mini-experiments with their products, which I kind of like.

The way they’re putting the products out, the hardware actually reminds me of the way Google does software. Google rolls out these betas that are often … don’t amount to a huge splash, right? So, we remember Google Wave and things like that, that didn’t quite take off. But they were market tests, in a way, and I think that’s what Amazon’s approach to hardware has been, and I think that’s how they’re going to infiltrate the smart home. They’re going to have enough of these experiments with different form factors, different ways of designing the hardware, with different looks, different appeals to different market segments, and I think they’re going to find out the stuff that’s working and build on that, and jettison the stuff that doesn’t.

So this is the complete … In some ways, this is the opposite of how Apple approaches design for products, because they have this one stellar experience that everybody wants or everybody did want when it came out. I’m not sure what the better way to approach it is, but that’s my two cents on Amazon’s approach to hardware. Dirk, I know you’re not a fan of the Echo, but given that approach, do you think that’s a good strategy for Amazon, or is that a wait and see if they’re successful in a larger sense?

Dirk:
Goddammit, I had my microphone up. I was muted.

Jon:
Oh. Okay.

Dirk:
Son of a bitch.

Jon:
No, that’s okay. Yeah, why don’t we start with you … I’ll just give a count-off, and then we can have Dave edit us back again.

Dirk:
Okay, great.

Jon:
Okay. Dirk’s going to start again in three, two, one.

Dirk:
Yeah, John, I think the strategy is a good one. Whether or not it results in Amazon controlling the smart home, controlling the conversation around design innovation, we’ll have to wait and see. One of the things that made it easy for Apple, aside from the fact that they were just executing great, was that all of the mainstream focus around computing technologies were limited to very narrowly, the personal consumer products category. Now, you’ve got Amazon in the smart home and I think it’s fair to say Amazon’s the leader in the smart home, even though Google is competing fiercely and the others … You know, the and the rest, you know, our professor and Mary Ann are also trying.

But okay, that’s one category. Then you’ve got self-driving cars, and Amazon as far as we know is at ground zero on that one, and Google is way out ahead, competing with other companies. Companies like Tesla, companies like old school auto companies. Then you have space flight, and there you have Virgin competing with Elon Musk competing with Jeff Bezos. Amazon, again, but I think it’s a different company. Now, it’s orders plural of magnitude of attention to different product categories today as opposed to 10 years from now, or 10 years before, when it was just the personal consumer computing products category.

So that’s another complicating factor. These different companies are going to win and lose in different categories, but who is going to emerge as the Skynet, right? To take this dystopic science fiction look at it. Or, will there not be any one emerging? Is it going to be more flat, just because the breadth of things that are being worked on and that the people care about is so vast? I think only time will tell on that.

Jon:
Yeah. I do think the other … those categories that you mentioned, whether it be automatic self-driving cars or space flight or any number of other emerging technologies, these are all part of ecosystems that are exceedingly complex in comparison to some of the consumer products of the past. The self-driving car alone is going to have to navigate any number of areas of regulation, insurance, infrastructure that go far beyond the product itself, which is complex in the first place.

It’s interesting to me the way that technology is permeating all these different areas of our lives, and as they get into these more complex areas, necessarily the winners and losers … First off, it’s taking a good long time for us to figure out who’s going to dominate those spaces. And secondly, it’s possible that no one is going to dominate those spaces for some time.

Dirk:
Mm-hmm (affirmative).

Jon:
Suffice it to say if I had to place a bet today on the integrated smart home, I think I would go with Amazon, which is not discounted all the Google Nest products and things like that. But there is something sort of sneaky and strategic about the way they are managing all of their digital services in conjunction with their hardware that I think is hitting the right notes. I think it’s correct. So I would place a bet on Amazon for the smart home, if you asked me that today. It sounds to me, Dirk, like you’ll need some more convincing on that, though.

Dirk:
Yeah, I think it’s too early to tell. I mean, they’re the early leader, but I’m not convinced of their design acumen. I think they’ve been sort of mediocre in design, and the only advantage that they have is that their primary competitors are mediocre in design as well, apple including. But you know, Jon, if you say you want to place a bet, there’s this thing out there called the Nasdaq, baby, go place your bet and see what happens.

Jon:
Yeah. Buy up some more Amazon stock, I guess. Yeah, I’m probably … probably already own some of it in mutual funds, but go out and buy some Amazon stock.

Dirk:
Put your money where your mouth is, Jon.

Jon:
Yeah, right. Listeners, remember that while you’re listening to the show, you can follow along with the things that we’re mentioning here in real time. Just head over to thedigitalife.com, that’s just one L in The Digital Life, and go to the page for this episode. We’ve included links to pretty much everything mentioned by everybody, so it’s a rich information resource to take advantage of while you’re listening, or afterward if you’re trying to remember something that you liked.

You can find The Digital Life on iTunes, SoundCloud, Stitcher, Player FM, and Google Play, and if you want to follow us outside the show, you can follow me on Twitter @JonFollett. That’s J-o-n F-o-l-l-e-t-t. And of course, the whole show is brought to you by Go Info, which you can check out at goinvo.com. That’s g-o-i-n-v-o.com. Dirk?

Dirk:
You can follow me on Twitter @DKnemeyer. That’s @d-k-n-e-m-e-y-e-r, and thanks so much for listening.
Jon:
So that’s it for episode 228 of The Digital Life. For Dirk Knemeyer, I’m Jon Follett, and we’ll see you next time.

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