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How Did Amazon Become a Leader in Smart Speakers?

Amazon Echo
How Did Amazon Become a Leader in Smart Speakers

Amazon’s Echo is the leader in smart speakers measured by installed base, which is quite the feat for a company that for so long was known as an online bookseller, not a hardware company. When it had tried to go beyond Kindle readers and launched the Amazon Fire smartphone in 2014, it flopped, as Cnet documented a year later.

Fast forward, and things have changed when it comes to Amazon’s foray into smart devices. Consumer Intelligence Research Partners, LLC (CIRP) studied the market and found the US installed base of smart speaker devices is 66 million units as of December 31, 2018, with Amazon in the lead by a big margin. (Consumer Intelligence Research Partners provides securities research to the investment community.)

CIRP found that Amazon Echo has 70% of the installed base, with Google Home at 24%, and Apple HomePod at 6%. Relative market shares have remained fairly stable, with Amazon Echo, Google Home, and Apple HomePod accounting for consistent shares over the past few quarters.

CIRP partner and co-founder Josh Lowitz said that while Amazon and Google have broad model lineups, Apple only has a premium-priced device (the HomePod). Apple “likely won’t gain significant share until it offers an entry-level product closer to Echo Dot and Home mini,” he said.

“Amazon and Google have succeeded in selling multiple units to a single household,” said Mike Levin, Partner and Co-Founder of CIRP. “Their strategies appear to include persuading owners to use smart speakers in multiple rooms, which helps create more active usage of the voice platform. And, Google has mostly caught up to Amazon in this strategy. A year ago, almost twice the percentage of Amazon Echo users had multiple units as Google Home users. Now, about one-third of both Amazon Echo and Google Home users have multiple units.”

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That multi-room approach helps explain Amazon’s latest acquisition plans – this week, it announced it will acquire eero, which makes products that improve wifi connectivity in the home.

Amazon also acquired Ring, maker of home security devices that also require wifi connectivity.

Ultimately, having an edge in smart devices in the home could help Amazon retain its edge in ecommerce, and it could extend its competence to the small-businesses and eventually to the enterprise market.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

One thought on “How Did Amazon Become a Leader in Smart Speakers?”

  1. Amazon knows how to play the long game, and the entry level Echo Dot in particular was heavily promoted during the holidays with many undoubtedly loss-leading bundles, promotions, and special “hidden” deal combos.

    Amazon was basically throwing these things at consumers to increase install base which in turn increases spend.

    Some Echo Dot examples:
    – $2 Amazon Echo Dot + 3-Month Amazon Music Unlimited Subscription
    – $29 Amazon Echo Dot + Kasa Smart Wi-Fi Plug Bundle
    – $139 Ring Video Doorbell 2 + Echo Dot

    Even at this moment there’s a great deal running for a 5-piece Ring Doorbell system and a 3rd Gen Echo Dot for $159 https://www.amazon.com/dp/B07L91DC51/ (NON-affiliate link)

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