Amazon takes the lead in smart home devices

Discussion
Mar 10, 2016

Echo, Amazon’s voice-controlled cloud-based personal assistant that often goes by its trigger-name, Alexa, has apparently taken the lead among smart home control devices.

According to data compiled from over 576,000 smart home device and application consumer reviews from January 2015 through late February from Argus Insights, Echo was the most discussed smart home ecosystem.

A close second was Apple’s HomeKit program, which uses the company’s voice-based intelligent personal assistant, Siri. Google’s ecosystem, its Works with Nest environment, came in a distant third.

While the discussion level points to a “real battle” between Amazon and Apple, the market research firm finds users are frustrated that Apple’s HomeKit forces users to rely on iOS devices, whether iPhone, iPad or Apple Watch. Echo benefits from its broad compatibility and multiuser capabilities.

“Consumers are taking notice that Amazon is choosing a community garden strategy over a walled garden approach favored by Google and Apple,” said John Feland, CEO, Argus Insights, in a statement.

Most recently, Argus Insights found consumer interest in Amazon Echo spiked since it was broadly promoted at the recent Consumer Electronics Show. TV ads featuring Alec Baldwin and Jason Schwartzman have also been running steadily.

Now ranking among Amazon’s top-selling items in consumer electronics, Echo has received more than 33,000 Amazon reviews at a nearly five-star rating. Echo launched in November 2014 with 13 skills, including Amazon Music, setting timers and learning the weather. With the help of third-party developers, it now has more than 300. In February, thermostats were added as Echo’s second home device integration after adding lighting systems last October.

Last week, Amazon introduced the $129 Tap, a portable battery-powered version of the $170 Echo, and an $89 Dot, which has a less powerful speaker than Echo but hooks up to another speaker.

Writing for Forbes, Aaron Tilley believes other smart home device makers will have to incorporate voice-based interactions to match the “ambient intelligence” Echo delivers. He writes, “Smartphone-controlled light bulbs and thermostats were fun at first. Now it all just feels like a drag.”

Source: amazon.com

DISCUSSION QUESTIONS: Has Amazon achieved a first-mover advantage in the smart home control devices space with Echo? What adjustments may Amazon, Google and others have to make?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Amazon also keeps adding capability to the Echo which results in more and more adoption — I use it so frequently now that I have added a second Echo and could see a point where the newer Echo devices, such as Dot, may end up throughout the house."
"If they allow Echo to continuously evolve, it could turn into another billion dollar business for the company. By having an open interface, Amazon allows other device makers to link to Echo, thereby creating more applications faster."
"Amazon does have first-mover advantage with Echo and the Alexa voice command platform is really impressive. Tom’s comment that the company opted for a "community garden" networking strategy is key and the ability Echo has to link with and control other devices is powerful."

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22 Comments on "Amazon takes the lead in smart home devices"


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Dick Seesel
Guest
6 years 2 months ago

This seems like the type of category where Apple would move faster than the competition, but perhaps they are aiming to be a “fast second” while learning from somebody else’s wins and losses. But Apple-watchers have made the same argument for years about Apple TV, which has yet to make a significant dent in the streaming TV battle.

So — for now — advantage definitely goes to Amazon. It’s not just a matter of developing an innovative technology (as with the Kindle) but their ability to link Echo to its entire e-commerce ecosystem. This is something that Apple simply can’t compete with, regardless of the products it develops in Echo’s wake.

Ben Ball
Guest
6 years 2 months ago

Of course.

Not only is Echo a very approachable and useful device for the average user, it is a natural fit for the Amazon brand. Amazon as a brand is convenience in all things consumer. Whether shopping for music or machines or makeup, Amazon makes life easier. That is why Echo from Amazon is such a natural and credible fit. Would an Amazon phone or laptop fit as well? We know the answer to that — no. Apple is about digital life. Amazon is just about life.

Zel Bianco
Guest
6 years 2 months ago

The idea of a “community garden” approach is really essential to smart home control and I believe Apple and Google will need to change their approach in order to keep up. While many people choose to live in homes with either all Apple or all Android products, most want the freedom to purchase the best appliance without worrying that it won’t pair with other items they have invested in.

Keith Anderson
Guest
6 years 2 months ago

Amazon has not only a first-mover advantage but also the unique capability to enable frictionless re-ordering of Prime-eligible past purchases.

Like Prime membership itself, a shopper’s decision to buy an Echo device increases its loyalty and lifetime value.

And brands that move first to influence “recursive moments of truth,” like the decision to subscribe to or reorder a product, have potential for exponential advantage too.

Before I tried them, I was cynical about the self-serving nature of the Echo and Dash services. But together they are game-changers.

Brian Numainville
Guest
6 years 2 months ago

As someone who engages with smart home devices and has a home full of them, I absolutely agree that Amazon has an advantage here that just keeps getting better. Amazon has developed an approach that increasingly interacts with all of the various devices in my home whether smart bulbs or thermostats from a variety of manufacturers — and voice commands make everything work in a much less cumbersome way (it is indeed a drag to use an app now). Amazon also keeps adding capability to the Echo which results in more and more adoption — I use it so frequently now that I have added a second Echo and could see a point where the newer Echo devices, such as Dot, may end up throughout the house.

Max Goldberg
Guest
6 years 2 months ago

Amazon has an edge in a nascent category. If they allow Echo to continuously evolve, it could turn into another billion dollar business for the company. By having an open interface, Amazon allows other device makers to link to Echo, thereby creating more applications faster.

My concern with the IoT continues to be security. Many IoT devices are easily hacked, allowing hackers to access users’ phones and computers. Echo comes with solid security, but the devices it will connect to do not. All it will take is a few well publicized hacks and this nascent industry could fall like a house of cards.

Ralph Jacobson
Guest
6 years 2 months ago

As with so many other technology categories over the past couple decades, the most convenient and promoted brand tends to remain standing when the dust settles. As these devices get even more functional and intuitive in operation, more and more consumers will adopt them and the best value, easiest to use and most heavily advertised will undoubtedly be the majority winner.

David Dorf
Guest
6 years 2 months ago

I use Alexa to control my Nest thermostat via voice, thanks to their open APIs. The new variants of Echo should appeal to an even wider audience, so I definitely think the momentum is with Amazon. They need to continue to make sure other IoT components are compatible.

Joan Treistman
Guest
6 years 2 months ago

Amazon has positioned Echo as a unique offering. So far advocates and promotion suggest it has incredible capability that is easy to manage and use. Others who compete will have to overcome the “me too” image and assert robust characteristics that motivate potential users.

Gordon Arnold
Guest
6 years 2 months ago

The Internet of Things (IoT) is very hot and product is selling well. The problems are connectability and device overhead issues. The use of off-the-shelf security and warning devices are only able to inform the consumer that there is some bad news. This problem is largely overlooked by investors until after the buy. For those interested in connecting to every thing they can, the number of apps is overlooked until they all need updates all day long. This issue usually crushes the ability to communicate by phone or messaging. No worries, bigger and faster smartphones are constantly on the way for a couple of $10 bills more a month. Welcome one and all to the world of information technology and the land of six-month obsolescence.

Tom Redd
Guest
6 years 2 months ago

Gang. Let’s get smarter then most people. This is a hype, keep up with Jeff, flash-in-the-pan. Just sit through this trend and some companies will make loads with new smaller sized, high sensing voice activated technology. It is all at the very early stages. I am confident that a good hacker could flip this device to listen to everything in the house and search all content collected looking for the words “vacation,” “password,” etc. Keep the negative element in mind before you run out and buying early stage ComicCON hit devices.

Our high-tech pride! Stuff that most people buy with lots of funny ads.

Chris Petersen, PhD
Guest
6 years 2 months ago

At this point in the smart home control race, Amazon is winning consumers based on five primary advantages:

  1. KISS: It is the simplest to use by far … no phone or tablet required;
  2. Choice: Not limited to specific type or brand of smart device;
  3. Ecosystem: Echo does much more that control lights (music, news, etc.);
  4. Rapid Evolution: Amazon can quickly upgrade Echo through “apps”;
  5. FUN: People use Echo because Alexa is becoming “interactive” and offers entertainment value beyond controlling devices.

While far from perfect, Echo’s Alexa is the closest thing to a HAL voice activated computer in space. Amazon clearly has a winner that consumers enjoy. But must also be careful not to overstep privacy boundaries in the consumer’s home and life.

Gene Detroyer
Guest
6 years 2 months ago

So do you think we can stop criticizing Amazon for their failed endeavors on device development and understand that those devices that are successful would have never come about if they said, gee, this isn’t our business, we better stick to book delivery?

Bob Amster
Guest
6 years 2 months ago

Definitely! However, if Apple comes up with one of its quintessential slick improvements, it will be a contested market. The winner: the consumer!

Jonathan Spooner
Guest
6 years 2 months ago

This is not simply a smart home play. This is a much bigger move to own the Conversational User Interface of the future.

Mohamed Amer
Guest
Mohamed Amer
6 years 2 months ago

The connected home is the future as we know it. “Connected” is the new battlefield for a consumer’s attention, experience and spending. We are just beginning to imagine the possibilities and the risks.

When blazing new business models that cut across emerging technologies and consumer behavior, making big business innovation bets will eclipse cautious, incremental efforts every time.

So while it’s too early to pass out medals for first place, Amazon’s model of fast cycles of “try, learn, repeat” is very likely to put them at the head of the class. The potential (and risk) is limitless.

Frank Beurskens
Guest
6 years 2 months ago

This one is a game changer. I agree with Jonathan Spooner’s comment that the next evolution will be the “Conversational User Interface.” My father-in-law, at 97, was excited to show how he uses Alexa throughout the day to check the market, weather and NPR news. Voice simply transmits data faster than keyboard and text; the remaining hurdle is perfecting accuracy.

Lee Kent
Guest
6 years 2 months ago

Just to spin a slightly different angle, I do not believe that Amazon’s advantage is due to first-move. The Fan Boys of Apple can get around that. What they can’t or rather aren’t getting around is the fact that Echo is not limiting devices. Period!

And that’s my 2 cents!

Vahe Katros
Guest
Vahe Katros
6 years 2 months ago

I looked through the answers and there was no mention of the developer ecosystem that Amazon has organized and energized. Organizing developers around a platform adds value to the platform. This is the old virtuous circle: the more valuable the platform, the bigger the audience, the more value to the developer. This is the flywheel, and if you add the fact that they run AWS, it becomes interesting. The network effect can be huge.

Here is an example from Amazon’s developer portal that shows how Campbell Soup has customized Alexa. On the site the description reads:

“Campbell’s Kitchen helps people solve the day’s most pressing question. Asking Alexa ‘What’s for dinner?’ instantly results in meal ideas and recipes.”

Here is the link to the full story…

 

Shep Hyken
Guest
6 years 2 months ago

I don’t know if it matters that Amazon received a first-mover advantage. What matters is that Amazon has a device that is easy to use and integrates with their Prime program. And, each week Amazon comes out with more and more uses for the Echo. Each week the customers love their Echo even more than the week before. Pretty powerful marketing. I believe that this is a text-book example of how to execute a product launch and increase customer usage and loyalty.

Karen S. Herman
Guest
6 years 2 months ago

Amazon does have first-mover advantage with Echo and the Alexa voice command platform is really impressive.

Tom’s comment that the company opted for a “community garden” networking strategy is key and the ability Echo has to link with and control other devices is powerful. Eventually, all of the IoT unique identifiers that transfer data from devices, machines, objects, even the dog’s microchip, in the home, could be channeled through Echo.

I’m most interested in the seven minute workout that is on Echo. Guess you just ask Alexa and then get started. How easy is that? And, easy does it.

Amazon makes networking easy with Echo. Google and Apple will have to do the same.

David Sealey
Guest
David Sealey
6 years 2 months ago

Price point is still too high with out a clear value proposition other than a coolness factor, and it’s easier than pulling out my phone.

Nest works because it can optimise your energy use. There’s a clear trade off as well as the coolness factor.

Exciting to see these technology platforms emerging. Wonder when/if they’ll ever be ubiquitous….

wpDiscuz
Braintrust
"Amazon also keeps adding capability to the Echo which results in more and more adoption — I use it so frequently now that I have added a second Echo and could see a point where the newer Echo devices, such as Dot, may end up throughout the house."
"If they allow Echo to continuously evolve, it could turn into another billion dollar business for the company. By having an open interface, Amazon allows other device makers to link to Echo, thereby creating more applications faster."
"Amazon does have first-mover advantage with Echo and the Alexa voice command platform is really impressive. Tom’s comment that the company opted for a "community garden" networking strategy is key and the ability Echo has to link with and control other devices is powerful."

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