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Home / Technology / Amazon Echo loses smartphone market share for Google Home. Here is why.

Amazon Echo loses smartphone market share for Google Home. Here is why.



  A Google home on the horizon.

Photographic illustration of slate. Photo by Joel Henry on Unsplash and Google.

It's easy to imagine a world where "Alexa" is synonymous with talking computers, or Echo with smart speakers, just like Kleenex is synonymous with facial tissue, Xerox with copiers, or Google with online search. (These are called generic trademarks, or proprietary eponyms, by the way. They need a better name.)

It's almost the world we live today, thanks to the dramatic success of Amazon's cutting-edge smart speaker and the surprisingly skilled digital assistant who animates it. Almost, but not entirely.

It is true that sound-driven smart speakers are on the way to ubiquity: Analysts predict that most US households will eventually have one. But at a time when sales are flourishing around the world, it becomes clear that Amazon's first advantage was not built to last.

Although there are no official sales figures, evidence suggests that Echo devices have lost ground in the past year to competitors on several fronts. Collect the pieces from a variety of market research reports using different methods, and the image is for a rapidly changing landscape where no single company is likely to dominate in the long run, but if someone does, it may be Google. It does not only mean industry viewers and investors, but for anyone who cares about the business models and privacy practices of tech goliathene that convey what we say, learn, buy and do.

Amazon, Google and Apple do not report the sale of Echo, Home, or HomePod, but prefer to hide them from the investor's review by picking them in categories like "Other Products" when reporting revenue. What we know about their sales comes to a large extent from third party market research companies, plus goodies and hints that the companies sometimes fall. The market research estimates may vary, sometimes largely based on their methodology.

With this warning aside, a consensus has emerged on the broad trends. Here are three of the big ones:

• Google Home devices quickly receive Amazon Echo devices in worldwide sales and may already have surpassed them.

• Apple's HomePod does not sell as bad as any initial reports suggested, and Samsung has just launched its own smart speaker.

• China is the fastest growing market for smart speakers, neither Amazon nor Google is a significant player there.

The common thread: Alexa loses its edge. And the obvious question: What happened?

As recently as a year ago, Amazon easily managed the global intelligent speaker business with a market share of 75 percent, according to estimates from two of the leading marketers Strategy Analytics and Canalys, based in Singapore. Amazon even praised a February earnings report that it had sold tens of millions of Echo devices in 2017. This figure included not only its flagship Echo smart speaker, but Echo Dot, Echo Show and other Echos, made the company myself (myself if there are no other Alexa-powered gizmos, such as press or fire TV). It makes sense that Amazon shattered the competition because there was not much competition yet: Google had just launched the home by the end of 2016, and Apple's HomePod was not yet on the market. The echo has been available since 2014.

Want rivals to experience an uphill battle. Amazon's beginning in smart speakers resembled the scary leaders that Apple famous built in portable MP3 players, smartphones and tablets. But Apple's high prices gave at least competitors an opening to build cheaper alternatives to the mass market. Not so with Amazon. Because it saw Echo in part as a way to Amazon purchases, the company sold its smart speakers at reasonable prices, and chose to maximize sales instead of profit margins. How can senks compete?

As recently as a year ago, Amazon ruled single market for the global smart speaker market, with a market share of up to 75 percent.

But visions from an Amazon smart speaker monopoly faded faster than almost all expected. In particular, Google has been in a hurry. This can be partly because its assistant is "smarter" than Alexa, with some calculations. But the echo is better in other respects, and it continues to be a top-class device in the category.

Analysts say that secrets to Google's success lie elsewhere. A big budget marketing flash, an aggressive push to partner with retailers and decision makers of smart home gadgets, and the company's reputation for answering search queries, did well. It did not hurt that the company also pushed Google Assistant's equivalent to Alexa on hundreds of millions of Android devices. Perhaps most importantly, Google has experience, partners and language skills in overseas markets where Amazon is less established.

Oh, and maybe you've heard that brick-and-mortar dealers are not big Amazon fans. "Retailers are more open to the idea of ​​organizing Google's smart speakers because Google is not seen as a direct competitor," said Vincent Thielke, research analyst for Canalys.

At the beginning of the year, according to several industry reports, the tide was in favor of Google. A firm Strategy Analytics, estimated this month that Amazon's global market share dropped from 76 percent to 41 percent over the past year, with Google's increase to 28 percent. The company projects Google's smart speaker sales to surpass the Amazon by 2020, said Bill Ablondi, director of smart home strategies.

  Chart showing global provider's smart smartphone market in Q2 2018.

For Amazon, these numbers will be scary enough. But Canalys ruled in a 16 August report that Google has already augmented Amazon in quarterly sales.

  Figure shows world-wide smart speaker market by Q2 2018.

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