Dive Brief:

• In an increasingly mobile world, the bigger potential for digital assistants is on phones and not home-based hubs like those from Amazon and Google, Apple CEO Tim Cook said on a conference call yesterday with analysts to discuss the company’s fourth quarter financial results. 
• Apple’s digital assistant Siri currently gets 2 billion requests a week and the number is accelerating with launch of iOS 10 and Siri’s arrival on the Mac. 
• Cook said that it is not necessary for consumers to throw away privacy to have a valuable digital assistant, it just may take more thought. 

Dive Insight:

Apple was an early arrival on the digital assistant scene with Siri, but is widely thought to have missed an opportunity to build a bigger presence in the home following the success of Amazon’s Echo product. With the launch of Google’s Home strategy, digital home assistants are expected to be one of the breakthrough categories in the coming year.

A widely-used virtual assistant would enable consumer-facing technology platforms to act as an agent between brands and consumers and effectively own a significant portion of consumer engagement throughout the day. For marketers, the technology presents new opportunities to engage consumers, with paid search budgets on digital assistants forecast to grow by 100% annually between now and 2021, according to Juniper Research.

While Apple is rumored to be readying its own home hub, Cook's words during the call with analysts suggest the company does not see the home as a major opportunity.

“[W]e live in a mobile society,” Cook said. “People are constantly moving from home to work and to other things that they may be doing. And so the advantage of having an assistant on your phone is it's with you all the time.

“That doesn't say that there is not a nice market for a home one,” he said. “I'm not making that point. I'm just saying on a balance point of view, I think the usage of one on the phone will likely be much greater.”

Apple sees digital assistants as a global opportunity and has put a lot of energy into delivering a great experience, Cook added. 

Overall, Apple’s fourth quarter results beat expectations in terms of iPhone unit sales and the company reported that demand for the new iPhone 7 and iPhone 7 Plus is outstripping supply. However, the numbers also reflect a continued slowing of growth. 

As smartphone adoption reaches maturation, the related software services offered by Apple to iPhone users is becoming a more important area of its business. The company reported that the growth in services revenue accelerated this year even as its overall revenue dropped. It also reported that users who take advantage of services such as the App Store and Apple Music spend more money with the company over time.