Apple (AAPL.US) launches wall-mounted hub HomeView to enter the smart home market; analysts: may generate new income for the services segment

According to Zhitong Finance APP, Apple (AAPL.US) on Tuesday released a new home hub device called HomeView, marking the first non-iPhone product launch since CEO John Ternus took over from Tim Cook in early September.

Apple stated that this device, equipped with a 7-inch screen, can be wall-mounted or placed on a desktop. It is designed for multiple users within a household and can use facial recognition to identify users, displaying relevant information accordingly. The starting price is $299, with shipments beginning on November 13.

Tuesday's launch event was the second since Ternus assumed leadership of the company. He previously served as the head of Apple’s hardware division before being promoted to CEO. Last month, Apple unveiled new iPhone models, including a foldable device named Duo, which retails for nearly $2,000.

Apple also introduced new Apple TV and HomePod hardware on Tuesday. The new Apple TV 4K is priced at $299 and comes with a redesigned remote control that emits sounds when lost. The Apple HomePod Mini speaker now comes in new colors and is priced at $149, a slight increase from the previous $129.

Compared to the iPhone, the products released on Tuesday are less critical to Apple; investors remain focused on iPhone sales. However, these accessories were positioned as showcases for the company's newly launched Siri capabilities last month.

Apple said that HomeView comes with Siri AI, capable of answering a wide range of questions. Users will be able to converse with Siri, with the conversation continuing on their iPhone or iPad. The device has built-in speakers for music playback.

Apple’s head of marketing Greg Joswiak stated in a release: "It recognizes your face, switching a shared home screen to your personalized experience, fills the room with stunning sound, lets you stay connected with loved ones via FaceTime, and makes it easy to control your smart home."

Apple announced that HomeView, powered by Apple Intelligence, will display information from “Messages,” “Photos,” “Calendar,” and “Reminders” apps based on the current user. It can also be used for FaceTime calls or serve as a digital photo frame. The device is powered by the Apple A18 chip and supports up to six users.

Apple TV, HomePod, and HomeView all fall under Apple’s Wearables, Home, and Accessories division, which generated $7.88 billion in sales in the most recent quarter ended June, accounting for about 7% of the company’s total revenue. This segment also includes wireless headphones like AirPods and the Apple Watch.

Despite Apple’s past forays into home products and platforms, Tuesday’s event signals that under Ternus, Apple is elevating home products to a higher strategic priority.

Jennifer Kent, chief analyst at Parks Associates, a research company focused on connected homes, commented: "Apple always waits for an ecosystem to develop until they feel confident they can offer an outstanding user experience."

Apple mentioned that the new products, including HomeView, can act as smart home hubs, coordinating notifications and operations at home, and are compatible with a range of products, including new locks, doorbells, and cameras from LG Electronics and Schneider Electric.

Apple is emphasizing privacy protection and stated on Tuesday that its Apple Home series accessories encrypt data, so only users and those they share with can access it. For example, other smart home cameras only provide users with limited access to video or store it on servers.

Kent said, “In terms of privacy and security, they have gone further than many other companies.”

Apple’s integration with smart homes is not just about sales; it also helps further lock customers into its ecosystem. Users who own multiple Apple products with interconnected services are much less likely to switch to Android phones.

Apple claims that HomeView can also serve as a smart home dashboard. It can be used to view camera feeds, adjust the thermostat, or lock connected doors in the home.

Apple stated that setting up a new smart home device only takes a single tap from the user's iPhone.

Tuesday’s launch demonstrates Apple’s confidence in venturing into new product categories. However, the entire consumer electronics industry continues to grapple with price increases and weakening demand related to memory and storage component shortages. This release comes amid reports that Ternus is pushing the company to accelerate its product launch rhythm.

The price of Apple’s new Apple TV 4K has increased from $199 to $299, marking another price hike following a similar increase earlier this year; previously, Cook had noted that Apple was struggling with climbing memory costs.

New Growth Points for the Services Segment

According to Dan Ives, partner and analyst at Yorkville Ives, Apple's new batch of Siri-powered smart home accessories could provide a new revenue stream for its services segment.

In an investor note on Tuesday, Ives stated: "Apple also revealed that Apple Intelligence features on the server side will have a daily usage cap, and extended access will require payment. We believe this clearly signals the imminent arrival of a paid Siri AI version and is a cornerstone for AI monetization, which could add more than 15% incremental revenue to the services segment over the coming years."

Ives noted: "Siri AI is core: anyone in the household can access broad world knowledge and naturally flowing conversations, and users with iPhones or iPads that support Apple Intelligence can unlock personal contextual information that spans Messages, Calendar, and their various applications. Conversations can continue across Siri apps on iPhone, iPad, Mac, Apple Watch, and Vision Pro."

Ives added: "Each of these devices is another touchpoint for Siri AI on a base of over 2.5 billion active devices, driving service revenues through iCloud+, Apple Music, and eventually paid Siri AI access. We continue to believe that Apple’s AI vision and monetization capability could add $75 per share to Apple’s valuation. We maintain our 'Outperform' rating and $400 price target."