HomeAccessoriesWhy Google & Amazon sold their speakers for a loss

Why Google & Amazon sold their speakers for a loss

Amazon & Google smart speakers have flooded the market; Apple's late to the party

Holiday sales this year did wonders to virtual assistant speaker’s sales’ numbers. Both, Amazon & Google, sold their cupcake-sized speakers (Amazon Echo Dot & Google Home Mini) like hotcakes. But to get customers accustomed to this new amalgamation of technology and convenience, they had to deeply discount them for the holiday season this year. Both these mini speakers which usually sell for $50 were brought down to $29.

With this hefty price cut Google & Amazon seem to adopt a strategy that is completely different from what Apple is strategizing for its upcoming HomePod speaker.

Apple’s HomePod speaker was announced back in June of last year and failed to ship during the holiday season. With the $349 speaker that is expected to go on sale any day now , Apple aims to earn mostly out of its retail tag and the expected increase in the Apple Music subscription of $9.99 per month.

Image result for apple homepod

On the other hand, Amazon and Google seem to be to more keen on getting consumers to adopt these smart speakers for which they had to lower the tag price. According to an analysis by ABI Research, the Echo Dot has about $31 worth of parts while the Google Home Mini costs around $26 to make. But these above figures don’t account for overheads, shipping and distribution expenses which most likely means that both these companies sold their mini speakers for a loss during the holiday sale. But what they lose in their retail revenues, they will most likely cover up in future with the sale of goods and data about buying habits.

According to a senior research analyst at IDC, more than 35 million smart speakers had been installed worldwide excluding US Christmas Sales.

For most consumers the leap from a $30 Google Home Mini & the $80 Google Home (prices during the Holiday Sale) to a $349 Apple HomePod may not be worth it. Without a doubt these cheaper speakers won’t match the sound quality of the HomePod but would the higher price tag of the HomePod it be sufficient enough to justify this gap in price? Some analysts think not. The blistering sales of Amazon’s smart speakers and now Google’s may be a reason to worry for Apple. According to a senior research analyst at IDC, more than 35 million smart speakers had been installed worldwide excluding US Christmas Sales. This explosion in the last 6 months might prove costly to Apple’s latecoming to the party.



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  • Jack Smith

    Had an Echo since late 2014 and now several Google Homes. The two are very different. The Echo you have to memorize the commands to use the device as it requires rigid language. The Google Home you can just say things however it pops up in your head.

    I think of the Echo as having a command line interface and the Google Home a GUI.

    Then the GH is just a lot smarter. Was watching TV the other day with wife and a year recap show with a video of Trump and Billy Bush. Wife asks if Billy Bush is related to George Bush. Just say “hey google is billy related to george” without last names and get a detailed explanation on the relationship. Just not possible with the Echo.

    But the best part about the Google Home is it just integrates much better with the iphone than the Echo. My wife clicks her shutter button on her iPhone and without touching an additional button later walks into our family room and ask for fine details in photos and the TV turns itself on, input sets itself and the iPhone photo appears in 4k on the largest screen in our house. We also have a 4k Chromecast and my wife already used Google Photos on her iPhone.

    The kicker is how easy to make all of this work. Just buy, plug in and log in and that is it. Google wires it all together for you without you needing to do anything.

    • Hey Jack, thanks for sharing this user experience.

      It must have been interesting being a super early adopter of upcoming tech. Both companies are trying real hard to get bigger in this game and topple the other one, and that has brought both of them to work a lot harder and make something much smarter.

      Where do you think they stand now?