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Amazon, Google Lost Money on Smart Speakers During Holiday Season: REPORT

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Amazon and Google both discounted their virtual assistant speakers so drastically over the 2017 holiday season that both companies likely sold each unit at a loss of a few dollars.

According to a new report from Reuters, Amazon discounted its Echo Dot to $29.99 USD in the run-up to the holidays, while the Google Home Mini was also seen for the same price in various points of sale.

Both Amazon and Google‘s willingness to lose money on their smart speakers highlights that they both are adopting a much different strategy than that of Apple in regards to its upcoming HomePod speaker.

While it seems that Google and Amazon are both willing “pay” for the data gathered from their speakers by selling each unit at a loss, Apple intends to make money from both that HomePod hardware and additional Apple Music subscriptions.

According to Reuters, Amazon and Google used the delay to “give consumers a taste of their respective digital assistants, Alexa and Google Assistant, at impulse-buy prices, hoping to lock in customers and profit from later sales of goods and data about buying habits.”

As the report explained, both the Google Home Mini and Amazon Echo Dot received discounts during the holidays. “That kind of pricing is great for consumers and bad for Apple,” said IHS Markit’s Paul Erickson.

Adam Wright, a senior research analyst at IDC, said even before the holiday season, about 35 million smart speakers were already installed worldwide.” Apple is in a bit of trouble,” he noted, concluding “We’ve witnessed an explosion in the last six months.”

Apple failed to ship its $349 USD HomePod speaker in 2017, as it had initially planned, and said the device would go on sale in early 2018.

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  • Dehop

    Two totally different markets, but to the end user it’s a battle of virtual assistants, and Apple over-engineering Homepod as an expensive home audio system is going to make them lose out, badly.

  • JimG

    Apple not competing in that market. They have said this previously. HomePod is about music not a virtual assistant – although that feature is there (and why not add it in). Apple does not compete in markets with slim profit margins. In addition, and unlike Google and Amazon apple is not collecting your personal info so they also have no incentive to discount a product for this purpose. Like I said that’s not Apples business model. They can’t lose in a market they are not competing with and with companies that conduct business for different purposes and different models.

  • Aleks Oniszczak

    But if HomePod is about music first, why is the sound not even in stereo? Google’s Home Max seems to be more about music – it sounds great and the music is in stereo as you’d expect. Sure you could buy another HomePod to fix that, but that doesn’t sound like “music first” That sounds like “virtual assistant first” since it’s mono like most of the other virtual assistant speakers.

  • dannymalt

    Nice spin there. Fact of the matter is, Apple HomePod will be a complete and utter failure. Bullshit that Apple doesn’t want to compete in the virtual assistant market, they were practically first to market with it when Siri came out. Google and Amazon now own that market in standalone virtual assistants. A $350 speaker is Apple’s answer? For that price I will buy a real speaker.

  • Mich

    It all about rolling out lucrative advertising. Turning your lights on and off are the bait!

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