Why Apple's (AAPL) Siri-Powered Smart Home Speaker Could Be the Biggest Announcement at WWDC - TheStreet

Updated from May 30 with additional information.

If the rumors prove true, Apple (AAPL) - Get Reportwill have a lot to talk about at its Worldwide Developers Conference this week. 

The annual event, which runs from June 5-9, will begin with a keynote address from Apple CEO Tim Cook, where he's expected to introduce the latest iPhone operating system iOS 11. Apple's live stream of WWDC can be accessed on devices with its Safari web browser, Windows 10-enabled PCs and via Apple TV, starting at 1:00 PM Eastern on Monday.  

The tech giant is likely to release some other updates to macOS, tvOS and watchOS, too, but those announcements aren't as exciting as what could be coming on the product front. Rumors have been swirling that Apple could unveil a Siri-powered digital assistant, as well as upgrades to all three of its MacBook laptops, a new iPad Pro and a refreshed MacBook Air. Apple, as is customary, doesn't comment on what products are in the works. 

Apple has reportedly begun manufacturing a smart home speaker without a screen that will be ready to ship later this year, according to a Bloomberg report published late Wednesday. The details give further credence to rumors that Apple will announce some kind of digital assistant product on Monday. A smart home speaker might help drive greater adoption of Apple's HomeKit smart home platform, Bloomberg noted, as well as help grow Services revenue -- a segment that Cook has increasingly highlighted in recent months. 

According to Bloomberg's sources, Apple's new home speaker will feature virtual surround sound and be tightly integrated with services such as Apple Music.

Loup Ventures analyst Gene Munster has assigned varying degrees of probability to the WWDC rumors, believing there's a 60% chance that Apple will release a "Siri Home Assistant," a 10% chance it'll introduce a 10.5-inch iPad Pro and a 50% chance that Apple will debut updated MacBook Pros. Apple is unlikely to make any augmented reality-related announcements at WWDC, Munster said, instead saving those for the upcoming iPhone release, likely due out in September. 

"While Apple TV has brought lots of Siri's functions from the phone to the home, an always-on digital assistant makes a lot of sense for Apple," Munster said. "We see these devices driven by natural use interfaces like voice as the future of computing. And Apple has ground to make up in the market for digital assistants in the home." 

Apple has remained silent amid a near explosion of smart speaker products from Silicon Valley giants including Amazon  (AMZN) - Get ReportAlphabet's  (GOOGL) - Get Report Google, Microsoft (MSFT) - Get Reportand the Essential Home, which was among several products unveiled by Android creator Andy Rubin on Tuesday. Amazon alone has released five devices equipped with its Alexa voice assistant technology -- the Amazon Echo, Echo Dot, Echo Show, Amazon Tap and Echo Look -- giving its voice-enabled devices a sizable lead among consumers.

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Apple's lack of an Amazon Echo competitor has led several analysts to believe it may have something in the works for WWDC on Monday. KGI Securities analyst Ming-Chi Kuo expects that Apple will announce a Siri-powered home speaker that's priced at $179, comes powered with Beats audio and features a cylindrical design (not unlike the flagship Amazon Echo). It could also have facial recognition sensors that can control appliances, locks, lights and other things around the home using Siri voice commands, according to MacRumors.

An earlier report from Bloombergsaid the device entered the prototyping phase in mid-2016 and is already being tested in Apple employees' homes. Additionally, CNET reported last May that Apple's smart speaker could have a camera. 

It's unclear whether Apple will take a page from Amazon's Echo Show and include a screen on its device, but Apple's marketing chief Phil Schiller recently commented that amid the rise of voice-activated digital assistants, Apple still values screens. 

"There's many moments where a voice assistant is really beneficial, but that doesn't mean you'd never want a screen," Schiller said in an interview with Gadgets360. "And so I think voice assistants are incredibly powerful, their intelligence is going to grow, they're going to do more for us, but the role of the screen is going to remain very important to all of this." 

If Apple does announce a smart home speaker on Monday, it would be the company's first major hardware release since the Apple Watch in 2014.

At the time of its release, Cook referred to the Apple Watch as the "next chapter in Apple's history," but a smart home speaker might be a truer new beginning for Apple. A smart home speaker would give Apple a place in the connected home, a market that McKinsey & Co. estimates will grow at a 31% compound annual growth rate, eventually being present in 29 million U.S. homes by 2017.

Access to that market, on top of Apple's 136 million U.S. iPhone users, means that a smart home speaker could be the answer to critics' concerns that the age of Apple is over