Microsoft Follows Apple, Google and Amazon into the ‘Hearables’ Era

This is the latest in LSA’s Skate To Where the Puck is Going series. Running semi-weekly, it examines the moves and motivations of tech giants as leading indicators for where markets are moving. Check out the entire series here, and its origin here

After Amazon’s entrance into the world of “hearables” last week, Microsoft yesterday did the same. At its Surface event in New York, it launched Surface Earbuds. In addition to standard audio fare like music and phone calls, they’ll integrate natively with Microsoft products like Office (more on that in a bit).

First, why is Microsoft launching wireless earbuds? Its motivations are similar to Amazon’s reasons we examined last week. After failing to market the Fire Phone, Amazon now sees wearables as a way to gain a direct touchpoint with consumers in a growing category, while the smartphone market matures.

You may remember Microsoft had a similar fate in smartphone era. Though not hardware, Windows Mobile was its wedge into the smartphone stack as both a revenue center and a way to position its apps (Office, etc.) in mobile workflows. Android came along as a free (loss leader) alternative and won that game.

Now, just like Amazon, it wants to market a mobile accessory that sort of leapfrogs the smartphone in getting a direct hardware touch point to consumers. Leapfrog is the key term as wearables are a quickly growing category (just ask Apple) while smartphones are reaching maturity/saturation (just ask Apple).

How does this position Microsoft products more directly to mobile users? Again, it’s similar to Amazon’s move last week in having native tie-ins to Amazon’s eCommerce-driving software such as on-the-go Alexa interactions. That gets its Echo line of products out of the home where more commerce happens.

For Microsoft, the Surface Earbuds have native integration and frictionless pairing with Microsoft products such as Office apps. That may sound strange at first but could create natural and valuable interactions in enterprise contexts where Microsoft hangs its hat. Think: smart audio cues during presentations.

Microsoft Surface Earbuds

For example, using voice input and automatic Powerpoint pairing, you can forward slides using voice commands ( which already sort of happens as a two-person job). More compelling use cases are voice transcription in Word, or live language translation — something Google has already done with Pixel buds.

Stepping back, this carries similar advantages to Apple’s vertical integration with AirPods. As AirPods users know,  a chief benefit is automatic pairing, which can only be accomplished if you own the hardware and software stack (Airpod + iPhone + iOS). This is classic Apple but others are now doing it.

That’s not a totally new concept, as Microsoft has been vertically integrating for a while. Surface laptops are its greatest hardware play, but now it appears to be moving into wearables to also own our senses. That’s the case with the enterprise-targeted Hololens but that’s a whole different story we’ll cover separately.

Speaking of the Hololens, wearables like its new earbuds (a category we’re calling “hearables“) start to paint the picture of an alternate modality for augmented reality. As we touched on last week, sound could be a more-natural and less-obtrusive way than graphics to get information “overlayed” on your reality.*

Audio AR” as we’re calling it is also a natural for local discovery and commerce. Smart glasses are several years away from stylistic acceptance, and holding up one’s phone (mobile AR) is cumbersome. But a subtle whisper in your ear to inform you of precise (5G-enabled) spatial positioning for local fare could be realistic.

Microsoft will more likely plant its audio AR stake in enterprise use cases where it can play to its strengths. But Apple (Airpods), Amazon (Echo Buds) and Google (Pixel Buds) could go the local commerce route, as it helps “future-proof” their businesses, especially Google.  There will be a lot to watch in the coming months.

*We’ll be back next week to go deeper on the concept of Audio AR, what it means for local commerce, and what Apple, Google and Bose have already done. See our full ‘hearables’ coverage here

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