Though it was held this year in October instead of September, Apple’s “Hi, Speed” media event was a largely typical iPhone launch party, opening with the expansion of its Siri-powered line of HomePod speakers (“Hi”), and concluding with the long-awaited addition of 5G cellular connectivity to the iPhone lineup (“Speed”). Some companies might have tread cautiously on these topics — Siri and 5G have both been dogged by complaints — but Apple didn’t hold anything back, using a seemingly endless parade of spokespeople to hype the new devices ahead of preorders. The 5G iPhone 12 family, it promised, will “blast past fast,” while the $99 HomePod mini will become a hub to “control your smart home,” bringing “intelligent assistant” access to the lowest price yet for any Siri device.
Having covered Apple for a long time, I’m not surprised that its latest pitches were all sunshine and roses, but I couldn’t help but feel that it was making big promises that could come back to bite the company and its partners. As of October 2020, the only thing less likely to thrill someone than a Siri speaker is typical U.S. 5G network performance, which despite boasts of 1-4Gbps downloads has seen average speeds that are barely better than 4G/LTE. Siri and 5G are both theoretically moving targets — they’re services that could improve at any time and in any region without advance notice — but prior to this event, neither has delivered on its transformative potential.
Transformative is actually a fair word here. Siri has long been marketed as a personal digital assistant powered by artificial intelligence, using machine learning to anticipate your needs without invading your privacy, and voice recognition to understand your intent. If Siri worked well, people could do a lot less typing and swiping, say nothing of thinking and planning, as an AI system would quietly be working for you in the background. 5G is expected to be the core of a fourth industrial revolution, enabling high-speed, low-latency mass communications between both people and machines. Faster phone data speeds are only a sliver of its capabilities, but that feature alone will empower a new generation of apps, including everything from massively shared augmented reality environments to new automotive experiences.
The problem is as much in Apple’s pitches as the likely performance of its new devices. Here’s what you should know.
5G and the iPhone 12 family
If you haven’t closely followed 5G during the first two years of its international rollout, here’s the quick summary: The next-generation cellular technology comes in three flavors — slow but long-distance “low band,” ultra-fast but short distance “high band,” and speed/distance-balanced “mid band.” Early 5G Android phones waffled between supporting one, two, or all three 5G flavors; Apple’s entire iPhone 12 family supports low, mid, and high band in the U.S., while omitting high band support internationally, since millimeter wave towers have barely been deployed elsewhere in the world.
That might sound simple, but the 5G story has been a twisting, confusing tale thanks to the top U.S. carriers. Number one carrier Verizon spent two years promoting a fast high band 5G network that’s at best uneven, and at worst downright bizarre, only launching a nationwide low-band network days ahead of the iPhone 12’s release. Second-place carrier AT&T tried to rebrand part of its 4G network as “5G Evolution,” lighting up bogus “5GE” icons on screens of numerous 4G devices before getting sued for deception, earning poor tested download speeds and an exhortation from industry watchdogs to stop 5GE advertising. It also launched a nationwide low band 5G network, but promised speeds similar to what it was offering with 5GE, and a mysterious high band “5G+” network that very few consumers have actually accessed.
Third-place carrier T-Mobile is in a somewhat better but not fantastic position. Like its rivals, it has a large blanket of slow low band 5G and a sprinkling of ultra fast high band 5G towers, but also a growing collection of towns and cities with mid band 5G, promising to cover thousands of locations by the end of 2020. The mid band capacity comes largely from former Sprint 5G towers, which delivered average download speeds of 200Mbps and peaks in the 600-700Mbps range, numbers that were expected to be typical for 5G this fall.
The problem: Instead of setting low expectations or being realistic about what most customers would see when using iPhone 12 devices, Apple instead relied largely on Verizon’s inflated 5G claims, which have already been knocked by industry watchdogs as misleading in scope. Apple said that Verizon iPhone 12 users could see 4Gbps peak download speeds with high band 5G, and international users could see 3.5Gbps peak speeds, but in reality, those numbers aren’t being seen outside of select testing zones. Verizon’s high band service has been estimated to reach only 3% of even supposedly “5G cities” — and only outdoors — so typical performance will be slower.
A lot slower. Verizon executives candidly admitted last year that their nationwide 5G would approximate “good 4G service,” which is to say that they’re aware that consumers will see their 4Gbps numbers but realistically come closer to 40Mbps. Verizon’s actual 5G high/low band performance gap may not be 100:1, but it will probably be at least 20:1, and almost no one will see the advertised highs.
Other carriers probably won’t even promise those numbers. A cellular speed testing company called SpeedSmart logged a handful of recent test results from 5G devices identifying themselves as iPhones, seeing speeds between 70 and 200Mbps for AT&T, and 77 to 621Mbps for T-Mobile, each across several major cities. But as SpeedSmart also revealed Verizon high band results ranging from 714Mbps to 2Gbps, the numbers are a reminder that fast downloads will hugely depend on close proximity to 5G towers, which in Verizon’s case will be “almost never” for customers.
How will people react to real world 5G performance that’s not as impressive as Apple’s pitch? We’ll have to wait and see. If I was betting on how the next few months will play out, I would expect to see a lot of 5G-related speed complaints spread across the United States, including in supposedly “5G cities” that actually have far less than comprehensive coverage, as well as gripes from people in countries with little or no 5G coverage. I would also bet on scattered reports of astounding U.S. 5G performance, amplified either explicitly by carriers or “without fingerprints” by Apple’s PR team, as well as some really good numbers from China, South Korea, Australia, the Middle East, and parts of Europe with performant mid band 5G.
My gut feeling is that Apple and its carrier partners will just grin their way through the complaints — and if history repeats itself, lawsuits — because past penalties have never been big enough to deter them from selling either devices or services. I’d love to be able to say that they’ll all exude quiet confidence because they know that 5G will only continue to get better over the next year or two, but given how long the U.S. has suffered through mediocre 4G performance, and the slow pace of 5G advancement here, I’m not quite ready to trust the carriers to deliver on the full performance of 5G.
Siri and HomePod mini
The “Hi, Speed” event was focused on two Apple product families, HomePod and iPhone, but there are massive differences between those products, starting with scale. Apple sold well over 200 million iPhones worldwide during the final year (2018) when it publicly reported iPhone unit sales, including more than 75 million units in the holiday quarter alone. Momentum alone suggests that a lot of people are going to start testing 5G iPhones in the very near future, but virtually no one will view the iPhone 12 as worthless if its 5G performance is underwhelming — that would just be a disappointment, and arguably bad marketing. Love it or not, 5G is just one of the new iPhones’ key features, and tens of millions of people would still buy it without that feature.
By comparison, Apple has never released sales figures for HomePod, but the total worldwide user base is suspected to be in the low single-digit millions, in part because of foolishly high initial pricing at $349. Even after its price dropped to $299 — with some retailers clearing out inventory at $199 — HomePod was widely reported to be a flop. Today, the size of the market for a cheaper HomePod model is a question mark, despite apparently strong continued demand for affordable Amazon Echo and Google Home speakers.
HomePod’s poor uptake might make one wonder why Apple would even bother with a sequel. My colleague Khari Johnson has the right answer: Apple is actively positioning HomePod mini at the center of a smart home strategy that encourages users to invest in surveillance cameras, door locks, lights, sprinkler systems, and related services that Apple’s either licensing or selling itself. In isolation, a $2 trillion company such as Apple might have no reason to sell $99 HomePods, but it’s copying Amazon and Google’s strategy, using cheap speakers as a lure to bring its voice assistant and related services into every room of a house. The big play here isn’t HomePod mini itself, but rather locking customers into its ecosystem for the long term, and squeezing developers for licensing and app fees.
Unfortunately, Siri doesn’t compare favorably with either Alexa or Google Assistant. Apple portrays it as popular thanks to the growing number of iOS, iPadOS, macOS, and watchOS users, but there’s little evidence to suggest that most people rely upon the digital assistant for anything but the occasional factual inquiry — something it may or may not properly answer, depending on the way the wind is blowing at a given moment. Last weekend, I asked Siri “who’s winning the Lakers game?” in the middle of last week’s NBA Finals, and discovered that its scoreboard system had just stopped working, at least for some sports. More persistent problems include Siri’s odd mangling of in-car requests to call known contacts or provide driving directions to stated addresses, mistakes that might be comical if they weren’t distracting people from operating their vehicles. There are too many other examples to count.
Apple might have considered Siri to be a major selling point for the first HomePod, but I know exactly zero people who cited Siri as their reason for buying that speaker — and relatively few who bought the speaker, period. Since Apple opted to hang the $99 HomePod mini’s appeal substantially on Siri’s persistent availability throughout a house, if Siri doesn’t work well on the HomePod mini, that could be a deal killer for some people, leaving only its AirPlay speaker performance as a reason to make a purchase. To the best of my knowledge, very few people are actively looking for AirPlay speakers these days, either.
We’ll have to see whether Siri receives an upgrade that meaningfully improves its performance, but I’m not holding my breath. The service has spent nearly a decade accruing complaints and occasionally even lawsuits, so on one hand, it’s a known quantity for Apple, and additional user complaints probably aren’t of much concern to the company. On the other hand, Siri has become a major concern in Congressional investigations thanks to allegations of anti-competitive tying — “using Siri to guide users to its own products and services” — and appears increasingly likely to be one of several legs of a U.S. antitrust case against Apple. As nice as a $99 HomePod mini might be in concept (and could be in practice if Siri starts working well), it could also give investigators prime evidence that Apple is willing to sell smart speakers at atypically low prices to keep people hooked on its services and other devices.
I’ll be the first to concede that the stakes are seemingly lower for Apple than other companies. Regardless of whatever arguably serious controversies might be taking place in the background, Apple has presented itself as unflappable when faced with legal concerns, and has a billion-dollar legal budget just to enable an atypically high risk, high reward strategy. Thanks as much to its massive market cap as DNA-level hubris, Apple just isn’t fazed by lawsuits that most companies would consider existential business threats. But it routinely boasts about its incredible rates of customer satisfaction, and the threat of unhappy users dropping its satisfaction scores apparently provides some incentive for the company to correct whatever mistakes it makes.
That having been said, Apple’s latest bets on 5G and Siri are indeed calculated risks, and ones that it certainly didn’t undertake without considering the options. It could have underhyped 5G and watched as some users had great experiences, or simply given up on HomePod speakers after the first one barely registered in the marketplace. The fact that it didn’t do either of these things suggests it felt good about getting on the 5G bandwagon at this point, and wanted to keep banging the drum for Siri.
If Apple’s latest bets pay off, it could multiply its existing presence in the smartphone and smart speaker markets, positioning it to become the world’s first $3 trillion company sooner rather than later. But if not, Apple could face a rough year of user dissatisfaction, a problem that will largely be of its own making. I personally can’t wait to see how everything plays out.