Amazon Flooding Smart Speaker Market

Amazon Flooding Smart Speaker Market

With the smart speaker market still comfortably in its youth, and voice as a computing interface just beginning to take hold, no one is sure what the best use cases for the technology are, or what the device that best captures the tech (as the smartphone did for mobile apps) will look like. Amazon’s solution: make a device for just about everything and see what works.

Here’s a breakdown of the new devices announced on the 27th

Echo – $100

  • The new Echo offers much better sound quality thanks to a dedicated subwoofer and tweeter which means it will compete more directly with Sonos and HomePod. It also has six interchangeable metal or sport fabric finishes for a new look.

Echo Plus – $150

  • The Echo Plus looks the same as the original Echo, this time in silver, white, or black, that also includes upgraded sound. It will act as a hub for smarthome IoT devices like lightbulbs (it comes with a Philips Hue smart bulb), locks, or thermostats.

Echo Spot – $130

  • With a circular 2.5-inch display, the Spot is a cross between the Echo Dot and the Echo Show. It runs certain screen-based apps, makes video calls, and is geared towards use-cases like a smart bedside alarm clock.

Echo Connect – $35

  • This device more or less turns any Echo model into a landline phone that allows you to make VoIP and traditional calls from you home phone number on you echo device.

Echo Buttons – $20 for two

  • The buttons seem to be made for the singular purpose of interactive games like trivia or Simon Says. You can bet we will see designated games in the Alexa Skills market that require use of the Buttons shortly. It is also said to be “the first of many Alexa Gadgets.”

New Fire TV – $70

  • The streaming box is smaller than its previous iteration and supports 4K and HRD video at 60fps. You’ll be able to control the new Fire TV with any Alexa device.

These additions come on top of existing products like the Echo, Dot, Tap, Look, and Show. If Amazon’s device lineup seems experimental, that’s because it is. After effectively losing in the mobile space, Amazon’s real goal is to become the de facto platform for the voice-controlled smart home. By flooding the market with hardware for every conceivable use case, Alexa hopes that by the time people realize that voice computing is here to stay, she will already be in enough homes to be the go-to platform that all IoT devices run on. For third party developers of smart home hardware, this is a classic network effect – hardware manufacturers want to make devices compatible with the platform that has the most users, and users want to buy the software (on Alexa speakers) that can control the widest array of smart devices. Furthermore, each new Alexa device means another trove of user data that is used to constantly improve the underlying AI software.

Remember, this is still a miniscule portion of Amazon’s business. Even though they have more than quintupled the number of people working on Alexa to over 5,000, the vast majority of their revenue comes from other segments like ecommerce and web services. This means they are able to sell these devices at a narrow margin, focusing instead on penetrating as many homes as possible. This recent product-line revamp makes the flagship Echo less than half the price of Apple’s upcoming HomePod and about on par with Google’s $130 Home device. We have written about our long-term outlook on the smart speaker market (here), which remains unchanged – the winner will be the product that delivers frictionless connectivity between devices and real increased efficiency. Amazon’s sprawling product line and compelling price points are attractive early on, but they could face difficulties with their lack of an ecosystem of staple products like phones and computers in the future. Nonetheless, Amazon’s aggressive expansion into the space is exciting for both tech-hungry consumers and those of us watching voice-first computing take form before our eyes.

Amazon, Apple, Artificial Intelligence, Google