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Apple supplier eyes smart speakers with facial recognition

Taiwan's Inventec Appliances to ship first HomePod batch before holiday season

TAIPEI -- Apple HomePod maker Inventec Appliances said on Friday that it expects future voice assistant products to offer 3-D sensing features, including facial and image recognition.

"We see trends that engineers are designing smart speakers that will not only come with voice recognition but also incorporate features such as facial and image recognition," President David Ho told reporters after the company's earnings conference. "Such AI-related features are set to make people's lives more convenient and to make the product easier to use." He added, however, that he was unsure at the moment whether smart speakers with more AI features in the future would become a hit in the market.

Ho did not specify which product he was talking about, but analysts said he is likely referring to the next generation of Apple's HomePod, the $349 voice-activated speaker that will compete with Amazon Echo and Google Home.

Inventec Appliances, a subsidiary of Taiwanese electronic contract manufacturer Inventec, currently monopolizes orders for the HomePod as well as AirPods, Apple's wireless earbuds, according to analysts. It also makes smartphones for China-based Xiaomi, wearable products for America's Fitbit and smart speakers for U.S.-based Sonos and others.

Jeff Pu, an analyst at Yuanta Investment Consulting, said Apple could roll out HomePods with 3D-sensing cameras in 2019.

Apple's recently released iPhone X is its first product to come with a 3D-sensing facial recognition feature that allows users to unlock phones and make payments, as well as  so-called animojis, or emojis that mirror users' own facial expressions through the front camera.

Meanwhile, Ho confirms that his company will ship a "new voice-enabled smart speaker" by the end of the year to meet the holiday season demand. He added that his company makes smart speakers for more than one client and some of them already shipped in mid-2017.

Apple said earlier this year that HomePod will be available in December, initially in Australia, the U.S. and the U.K. Inventec Appliances will only ship about 50,000 units of the device by the end of this year, said Arthur Liao, an analyst at Taipei-based Fubon Securities.

"According to supply-chain checking, Apple is set to make 4 million units of HomePod in 2018, but we are currently a bit conservative about whether the demand would be that good," said Liao.

For 2018, company officials said Inventec Appliances' total shipments of smart and connected devices would likely grow single digits from this year's estimated level of around 70 million units. They did not break down shipments among smartphones, Apple products and others, but said demand for audio wearable gadgets will continue to swell.

Fubon's Liao said shipments of AirPods would total around 20 million units this year and could increase to around 30 million units in 2018.

China-based Luxshare Precision Industry is working hard to procure orders to make AirPods for Apple in 2018, while Inventec will also need to split orders with major iPhone assembler Hon Hai Precision Industry for manufacturing the HomePod next year, according to industry sources.

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