Amazon and Google engage in a smart speaker price war
For Black Friday, Amazon.com slashed the price of its Echo Dot to $30 from $50, and the item became the best-selling product from any manufacturer in any category across the site, with millions sold.
With prices cut on all six of its Echo devices, Amazon said Echo devices were “extremely popular” this holiday — Echo Spot, Echo Dot and Echo Buttons reportedly sold out.
In sync, Google reduced prices on its Google Home Mini to $29 from $49 and the regular Google Home speaker to $79 from $129 over the holiday period. This year, Google Home was the sixth most downloaded app on Christmas day. (Amazon Alexa was #1.)
Many now believe that establishing a foothold in connected homes is more important than margins for both companies. Wrote Shira Ovide for Bloomberg. “Those companies view the speakers as a gateway to hook people on Amazon’s collection of Prime membership benefits or to lure them to Google apps and internet services.”
As The Wall Street Journal also pointed out, while smart speakers get the most attention for being able to answer questions or play music, demand for connected home features, such as lighting, heating and locking/unlocking doors, has to pick up for smart speakers.
Falling behind amid the price wars is believed to be Apple, which delayed the launch of its HomePod until early 2018. The device is coming out at a comparatively lofty price of $350. With LG and Samsung planning to introduce their own devices, smart home speakers are expected to still generate major buzz at the upcoming CES 2018.
As of now, it’s a two-player race. A November Consumer Intelligence Research Partners (CIRP) report suggested that Amazon’s market share in voice-activated speakers was 74 percent versus 26 percent for Google.
“Which is better, or which provides the most value is messy to evaluate,” Frank Gillett, VP and principal analyst at Forrester, told Advertising Age. “Ultimately, this is about Google and Amazon getting people to use their digital assistants.”
- Celebrates Biggest Holiday; More Than Four Million People Trialed Prime In One Week Alone This Season – Amazon.com
- Amazon Echo Prices Turn Smart-Speaker Market On Its Ear – The Wall Street Journal
- Apple’s HomePod is a misplaced bet in race with Amazon Echo and Google Home – The Seattle Times
- Amazon Alexa and Google Home top App Store charts on Christmas Day, implies smart speakers were popular holiday gifts – 9to5 Mac
- After a busy 2017, Alexa is still on top — and still evolving – CNET
- Google And Amazon’s Childish Little Fight Is Spilling Into Your Home – Forbes
- Google Home Vs. Amazon Echo: Who Won The Holiday Ad Push? – Advertising Age
- Early indicators of Amazon Echo and Google Home holiday sales highlight cost of Apple’s HomePod delay – Venture Beat
- Samsung Aiming to Release Smart Speaker to Compete With HomePod in First Half of 2018 – Mac Rumors
DISCUSSION QUESTIONS: Is it more important at this point for Amazon and Google to get their smart speaker devices into households than to earn a decent margin? How do you see the battle between the two affecting other brands launching in the category? Do you see an opportunity for a wide range of devices across price ranges?