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Summary

Amazon is expanding its Echo line with a new main speaker that incorporates a smart home hub and a connected alarm clock with a visual display that will enable users to check visual news and connect to their home security cameras. The Echo Plus will be available in the US from October 31, while Echo Spot will begin shipping in December. Both devices represent the evolution of the company’s strategy to keep consumers from turning to rivals such as Google Home or Apple’s upcoming HomePod.

Echo use cases evolve in the face of competition

Amazon is expanding its line of Echo products to address every potential use case and price point. For example, the Echo Plus includes built-in ZigBee to reduce the need for external hubs and apps, and ships with a single Philips Hue light bulb. Amazon says it will be compatible with more than100 connected devices. Priced at $149, it looks set to take over as the flagship Echo speaker, with the original version positioned for later adopters.

Echo Spot, meanwhile, is billed as a cross between the Echo Dot and Echo Show, with a 2.5-inch screen that enables users to check on baby monitors or IP cameras, for example, while also remaining unobtrusive. The device will cost $129, which Amazon hopes will persuade users to buy multiple units to put in different points throughout the home.

By catering to multiple use cases, Amazon’s aim is to lock users into its ecosystem and make it less likely that they mix and match between its Alexa devices and Google Home or HomePod. At the same time, it is creating more points of entry for fans of other AI assistants, in the hope of bringing them over to the Alexa ecosystem and gleaning more data points from their voice searches.

This strategy has some risks, however. The main one is that with the new launches, Amazon cannibalizes sales of existing devices. The Echo Spot, for example, could cut into sales of Echo Show if consumers decide that the smaller screen size is an acceptable tradeoff for the lower price point. At the same time, consumers who are wedded to Google or Apple’s ecosystems are likely to stick with Google Home, or HomePod once it launches.

Because Amazon is covering as many use cases as possible to keep Google Assistant from gaining a foothold, the threat is potentially greater for Google Home. In addition, the integration of a ZigBee-compatible smart home hub could be a response to Samsung’s introduction of SmartThings hub technology into its Connect Home mesh Wi-Fi routers.

Appendix

Further reading

"Echo Show and Echo Look take Alexa to the next level of personal assistance," TE0003-001026 (May 2017)

Author

Francesco Radicati, Senior Analyst, Consumer Technology

francesco.radicati@ovum.com

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