(Newswire.net — April 8, 2020) — That’s right, smart speakers.
The Fight For Voice Control in The Connected Home
At CES, the pioneering global tech conference, Amazon vied for primacy with Google as both giants loudly proclaimed their primacy in the voice-first vertical.
While Google can accurately claim they’ve got their AI-powered Google Assistant on 1 billion devices, that figure is skewed by Assistant’s presence on Android phones.
Amazon, by contrast, has sold a still-impressive 100 million smart speakers equipped with the inimitable Alexa. Compare that to Google Home’s sales of roughly 50 million units and it’s clear that Alexa continues to dominate the way we control our connected homes.
As with all aspects of home automation, though, the landscape is constantly shifting. Tech Crunch predicts that stiffer competition from Apple HomePod and Sonos could lead to Amazon’s smart speaker market share dropping below two-thirds for the first time ever.
Since smart speakers are sometimes even sold as loss leaders, a couple of questions crop up…
- Why is Amazon so concerned about retaining their stranglehold on the smart speaker vertical when margins are so tiny?
- Why did they start selling smart speakers in the first place?
Aside from the obvious ability to profit from buying data, by locking consumers into their ecosystem, manufacturers have the potential to upsell them to much more expensive smart home tech. Still a relatively young market, home automation – also known as domotics – still has no real unity and compatibility is by no means standard with inter-brand devices.
So far so good but there’s a problem for Amazon…
While the company can be considered the godfather of smart speakers, the remainder of their home automation range has not been broad or deep over recent years. We’ll look at how that’s changing but how about their reasons for getting into this sector in the first place?
Until 2014 when the first Echo device debuted to rapturous applause, Amazon had been completely focused on their retail services. When revenue growth here stalled, the ever-savvy Bezos smartly pivoted into home automation and the rest, as they say, is history.
Amazon: Beyond Smart Speakers with Third-Party Integration
With more and more manufacturers from Sonos to Bose joining the smart speaker fray and profits already slim due to those delicate margins, Amazon needs more to continue swelling that bottom line.
One way in which they achieved this was to open out their ecosystem using the Works with Alexa scheme.
By streamlining certification and ensuring approval happens within a couple weeks, Amazon opened the floodgates for other smart tech firms to jump on board. Since voice control is such a huge motivator for proponents of connected homes looking for an easier life, if you can control a range of devices using Echo smart speakers… well, you’re more likely to choose Alexa than Google Assistant as your default virtual butler.
This is a wise move indicating the global giants don’t need to lock down their ecosystem à la Apple to drive sales.
Not content to rest on their laurels, the company has also developed a spread of other smart devices to bolster their armory.
- Cloud Cam is a pocket-friendly wireless indoor camera allowing you to keep tabs on your home remotely.
- Appealing to complete beginners, their nifty Smart Plug allows consumers to test the home automation waters without committing. The literal plug-and-play ease of this neat device allows you to add a layer of intelligence to lighting, fans or small appliances with voice control and no requirement for a third-party hub.
What else, though?
It’s All About Acquisitions
As you can see, while it’s expanded beyond the rock-solid foundation of smart speakers, that line-up of products is still skimpy.
Again, Amazon’s approach differs from that of many smart home brands. Rather than going all-in on proprietary devices, Amazon instead adopted a policy of investment and acquisition.
Throwing cash behind ecobee, Luma, Rachio and Scout Alarm was just the beginning…
Amazon bought these companies in entirety:
- Blink
- Eero
- Ring
Clearly, targeting these companies was the result of some serious analysis and forethought, but what was the intended result of this trio of bold acquisitions?
Blink
Paying $90 million for Blink back in 2017, Amazon was looking at far more than simply bolstering their home security range. Blink, if you remember, came into being as a smart doorbell start-up.
Battery life is a huge deal in connected devices and Blink had some innovative chips now in Amazon’s acquisitive hands.
The existing line of indoor and outdoor security cameras also added to Amazon’s stable indirectly.
Eero
Underpinning any connected home is the need for strong and stable WiFi.
Buying this wireless router and extender outfit has allowed Amazon to start competing with the other major players offering mesh WiFi networks.
Ring
Paying an eye-popping billion dollars for security specialist Ring, Amazon again strengthened its presence in the home automation world, albeit at a significant cost.
Since buying out Ring, the company has branched out into smart lighting, one of the most common entry points for home automation and another astute move.
Final Thoughts
Throw in Amazon’s smart home services launch where qualified and vetted technicians can install your home automation gear and the Fire approach to home entertainment, Amazon has finally achieved its goal…
According to Market Watch, Amazon now has more connected devices than Google or Apple.
Things move at a hugely accelerated pace in the smart home space so it remains to be seen for how long Amazon can occupy pole position. For now, whether you want a smart speaker to control your tech using voice commands or to strengthen the security protecting that connected home, the Amazon ecosystem is hard to avoid.