Echo in here? Amazon and Google fight for the home

Written by on December 6, 2016 in Guest Blog with 0 Comments
Your Design / Shutterstock.com

Your Design / Shutterstock.com

Amazon Echo opens a market for Google Home to dominate. The Amazon Echo has sold reasonably well but I think that the device is not clever enough nor integrated enough to make it a ‘must-have’ product.

This leaves the goal wide open for Google Home to dominate as 60% of Amazon’s customers are already aware of the device category but only 2% of them have bought one.

A report from CIRP has found that Amazon has shipped 5.1m Echo devices since inception but only 30% of users use the device for information while 40% use it as a speaker.

  • A very meagre 10% use it to control the home.
  • This is a problem because unless Amazon can convince users to use Echo for things other than listening to music, it will quickly become just another speaker.
  • The problem is that Alexa, the digital assistant that resides inside Echo, is not very clever and much of the time simply does not answer even when it has heard the user.
  • Furthermore, there is no real integration meaning that the other functions of the device are not intuitive and easy to use.
  • For example: the statement “Alexa, I am cold” does not have any effect at all.
  • Instead the user must say “Alexa. Open Nest. Increase to 75 degrees. Close Nest” which can probably be done more intuitively from a mobile phone.
  • This is just one reason why the understanding of natural speech is so important and why apps and services on devices need to be able to talk to each other.
  • Consequently, I think that there is a huge opportunity for Google Home as best-in-class Google Assistant resides in the device and Google understands the importance of integration.
  • Furthermore, I think that Google is the world leader in natural speech recognition and processing and should therefore be able to deliver the best, most easy and fun to use experience of any.
  • The icing on the cake is that Amazon has prepared the market for Google Home as 60% of its customers are aware of a home speaker, that one can ask questions of, but only 2% have bought one.
  • Hence, the main issue for Google Home remains its execution to make the most of this opportunity just as it is for Google Pixel to capitalise on Samsung’s Galaxy Note 7 disaster.
  • This is a rare opportunity for Google to capitalise on the trailblazing and mishaps of its competitors but I still think that all of Alphabet’s upside has already been captured in its share price.
  • Consequently, I still prefer Baidu, Tencent and Microsoft which offer more upside although they have different market exposures to Google.

This article was first published on RadioFreeMobile.

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About the Author

About the Author: Dr Richard Windsor is the founder of Radio Free Mobile which is an independent research provider. The research helps clients to understand and evaluate the players in the digital ecosystem and presents a unique perspective on how all the pieces fit together in an easy to read and digest way. The product is available on a subscription basis and counts members of the handset, telecom carrier, Internet, semiconductor and financial industries as its subscribers. RFM is the land of the one man band meaning that Dr. W. also makes the tea. .

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