Amazon – The assistant’s new clothes.

Some new clothes but the same old Alexa underneath.

  • Amazon has launched a seemingly endless array of new Alexa-enabled devices and updates which are clearly aimed at keeping the ever threatening Google Assistant at bay.
  • Amazon launched no less than 12 new pieces of hardware, some which updated older versions, making them look more like Google’s Home products as well as some going in a completely new direction.
  • The new categories include:
    • First, Echo Auto: is an after-market device that enables Alexa to be present in any vehicle for $50.
    • The small dongle plugs into the vehicle’s infotainment system (presumably through the auxiliary connection) and enables hands-free interaction with Alexa.
    • It gives the full flexibility of Alexa in the vehicle, but I suspect that there will be voice recognition issues.
    • This is because the vehicle is full of white noise which both the Amazon Echo and Google Home really struggle with.
    • Second, Echo Wall Clock which is by far the most interesting device launched in my opinion.
    • This is a $30 clock that pairs with an existing Echo device and shows with LCD markers on the phase the progress of any alarms and timers that have been set.
    • Alarms and timers are one of the biggest uses of Alexa in the kitchen, and this is an excellent and cheap addition that meaningfully adds to the user experience in the kitchen.
    • Third, Echo sub: which is a subwoofer that works in conjunction with an existing Echo device to provide a much better audio experience.
    • This is clearly aimed at the HomePod and the Home Max but comes at a fraction of the price at $130.
    • Like the clock, this aims to extend the functionality and performance of existing products rather than forcing users to start again from scratch.
    • Fourth, Echo Link and Echo Link Amp: which are two devices that enable Alexa to be present on high-end HiFi systems via a connection directly to the speakers (Link Amp) or to the amplifier (Link).
    • Connecting an Echo Dot via a 3.5mm cable does not guarantee the best quality which is the problem that the Link and Link Amp aim to solve.
    • It does not, of course, solve the problem that the HiFi amplifier has to be on all the time for true voice activation to work, which renders these two devices pretty useless in my opinion.
    • Fifth, the Echo Input: which is simply the microphone array and Alexa and nothing else.
    • This connects to another speaker using a 3.5mm cable or Bluetooth and is clearly designed simply for that.
    • This device clearly serves two purposes.
    • First to be shipped with 3rd party speakers to make them Alexa-enabled and to push the price point even lower.
    • The Echo dot has lost market leadership to the Google Home Mini (Strategy Analytics) and with a $35 price point, this lowers the price bar from its current $50 in the hope of making up lost ground.
    • Fifth, The Amazon Basics Microwave: which is exactly what it says, connects to a nearby Echo and has a built-in dash button.
    • Alexa is not built in because microwaves can cause a lot of WiFi interference meaning that getting reliable performance from a built would have been very difficult.
    • However, the price is excellent at $60 and confirms Amazon’s push into home appliances.
  • Amazon also updated the Echo, Echo Show, Echo Dot, Ring security camera and released home security functionality as well as APIs to allow developers to program skills for the Echo Show to make the most of the screen.
  • Most of these updates bring the design style into line with Google and Apple but of course, the real quality is determined by the assistant itself.
  • When it comes to Alexa itself, it remains outclassed by Google’s superior artificial intelligence.
  • This means that as long as Google gets the hardware right when it launches its new products in October, it should be able to continue to close the gap on Amazon.
  • A key part of this will be price, meaning that Google will need to have something to match the Echo Input in order to keep market share going its way.
  • Amazon has launched enough to keep its devices looking stylish and relevant, but when it comes down to the assistant it is going to be more of same.
  • Hence, I still think that the smart home is still Google’s to lose and see no reason why that view should change based on these launches.
  • I am warming up to Google once again mainly because it is likely to escape the most unscathed from the current privacy-related backlash and hence should outperform its peers.
  • That being said, privacy advocate Apple is likely to fare the best of all while the current storm rages.

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.