|Real-time Estimate - 10/28 01:12:24 pm|
Amazon Event: New Smart Home Devices Using Alexa Unveiled -- Update
|09/24/2020 | 02:56pm|
By Sebastian Herrera
Amazon.com Inc. on Thursday rolled out a new lineup of Echo smart speakers with a spherical redesign and updates to its Alexa virtual assistant.
Starting at $99.99 for its flagship model, the Echo will include new capabilities that Amazon said will make the assistant smarter. This includes a new skill by Alexa to clarify questions customers ask, which the company said over time will enable Alexa to provide sharper answers. It also has a faster processor capable of improving artificial intelligence capabilities, the company said.
Amazon said it is aiming to build more sustainable products. The Echos unveiled Thursday are made of materials such as recycled fabric and aluminum, and Amazon said the devices will feature low power modes to make them more energy efficient.
The tech company started a virtual event for select viewers at 1 p.m. ET in place of its annual showcase with an audience, which has generally been held in the past at its Seattle headquarters. Amazon's new Echo speakers also include a device with a clock and a version for children with a tiger or panda design.
Amazon uses its hardware event to showcase an array of products and services featuring Alexa or internet-connected devices often used for home security and surveillance. The reveals differ greatly from those of competitors such as Apple, which typically announces less than a handful of new products at its events.
To extend its reach in certain markets, Amazon has undercut rivals in the past with sales and discounts for its devices and hardware, occasionally selling products at cost to gain acceptance among customers. The company has also used its hardware offerings to steer consumers toward services such as a Prime membership.
Amazon's Echo Buds, for example, are priced at $129.99, although the company at times has sold them at $89.99. Apple's cheapest AirPods retail at $159.99, although they sometimes sell at a discount as well. The AirPods, however, have been more popular and accounted for nearly half of all sales of wireless earbuds in 2019, according to Counterpoint Research.
Amazon's strategy puts less pressure on the company to establish hardware hits compared with Apple or even Alphabet Inc.'s Google, said Gene Munster, an analyst at Loup Ventures, a venture-capital firm specializing in tech research. The company is searching for its next big hit after its Echo smart speakers powered by Alexa were unveiled in 2014.
"Amazon takes these events as opportunities to basically do market research about a product's viability," he said. "Amazon isn't held to the same hardware standard as a company like Apple, so they have more flexibility to experiment. Alexa began as an experiment."
Amazon has diversified its line of Echo products in recent years by releasing various editions tailored to video, children and music. The updates add to a long list of devices powered by Alexa, from ear buds to kitchen devices and vehicle products.
The company accounts for about 54% of the smart-speaker market, according to estimates from Loup Ventures based on sales. But Amazon faces increasing competition, especially from Google, which now represents 36% of the market and could eventually overtake Amazon's lead, according to Loup Ventures. Amazon doesn't disclose financial or sales data for its Echo devices.
The company usually offers steep discounts for its devices in sales events, including during its annual Prime Day shopping extravaganza, which this year is expected to be in mid-October. Amazon earlier this year delayed the sales event, which usually takes place in summer, as it initially struggled to respond to heightened customer demand during the coronavirus pandemic.
Amazon has sought to integrate Alexa into as many products as possible and experimented greatly with that goal. Last year's event, which was highlighted by the Alexa-enabled Echo Buds, also included announcements for eye frames and a finger ring featuring Alexa that the company has only made available to select customers.
There are few consumer categories in which Amazon is absent. In late August, the company revealed a health and wellness tracker named Halo that the company said tracks users' body-fat percentage, heart rate, sleep and emotions. The band is retailing at $64.99, but the price will rise to $99.99 after the initial rollout.
In recent years, the retailer has pushed itself further into the smart-home and security industries. Much of that effort has centered around its popular but controversial Ring cameras. As of the second quarter this year, Amazon was the top vendor by shipments in both the smart-speaker and video-doorbell categories, according to Strategy Analytics.
Amazon has received backlash for partnering with hundreds of police departments and allowing them potential access to users' camera footage. The company in June said it was pausing law-enforcement use of its facial-recognition software for a year to allow Congress to implement regulatory measures around the use of the technology.
From smart locks to lighting, Amazon's home devices lineup has continued to grow.
The company later this year is launching a wireless network named Sidewalk that it said will enable motion alerts from security cameras to operate even when Wi-Fi goes down. Eventually, Sidewalk will support connected devices to help locate pets and operate lighting, Amazon said. The company's push into smart-home devices is more significant now that people are home more than ever, Mr. Munster said.
Write to Sebastian Herrera at Sebastian.Herrera@wsj.com