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Summary

Amazon Echo Plus is a game changer that will make it easy and affordable for consumers to adopt smart solutions at home. Several vendors in the smart home industry are eager to see how Amazon's Echo Plus strategy will help them hit the mass market. However, at this stage, Amazon's initiative only offers a glimpse of the full potential of the smart home.

With Amazon Echo Plus, smart home vendors can stop the bridge being an adoption barrier

With the recent launch of Amazon Echo Plus, Amazon aims to simplify the path to the smart home, especially for consumers that see the need to deploy a separate bridge for smart solutions to work as an adoption barrier. For those waiting for technology to evolve, the Amazon Echo Plus represents a good way to engage with the smart home world. But it's bad news for early adopters who have already bought an Amazon Echo: They are stuck with an inferior smart AI-enabled speaker and probably a few bridges from other smart home devices that are no longer needed.

The new all-in-one AI-enabled speaker with smart hub capabilities represents a milestone in the evolution of the smart home industry. Amazon is enabling users – especially first-time users – to remove the middleman and gain direct connectivity to more than 100 smart solutions, without needing to buy additional bridges. The Amazon Echo Plus simplifies things further by giving Alexa the ability to discover consumers' connected devices, eliminating the technical hassle usually associated with setting them up manually via the vendor's app.

Amazon is not only making the smart home journey easy for consumers, but also for several third-party vendors. ZigBee-friendly companies such as Philips Lighting, Samsung SmartThings, TP Link, GE, and WeMo see the new Amazon Echo as an opportunity to offer a bridgeless experience to their customers. From a practical and commercial point of view, having independent bridges for each connected solution can't be sustainable for much longer. For this reason, a single AI-enabled device that works as a hub for different smart home solutions is a win-win for both Amazon and its technology partners.

However, the solution is not yet perfect. For example, Philips Hue light bulbs can work directly with the Echo Plus, but consumers will still need a Philips bridge to unlock all the functionality of the Hue system. In other words, Amazon Echo Plus only offers a partial solution to the bridge problem for Philips customers.

Ovum believes that Amazon has made it easy for vendors such as Philips Lighting to overcome the initial bridge barrier, but at the cost of offering more basic use cases – thus only lowering the bridge barrier rather than removing it altogether. Despite Amazon's supremacy in this market segment, it is still too early to crown it the ultimate gatekeeper. Instead it is better described as the smart home Kickstarter.

Appendix

Further reading

Smart Home Case Study: Amazon, TE0003-000936 (September 2016)

Smart Home Case Study: Philips Lighting listens to the customer to stay ahead of the curve, TE0003-001066 (October 2017)

Author

Mariana Zamoszczyk, Senior Analyst, Consumer Services

mariana.zamoszczyk@ovum.com

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