News You might have missed: October 6th, 2017

Sonos’ Agnostic Approach to Digital Assistants

This week Sonos announced the Sonos One (One) with integrated Alexa. The One does not look different from the Play One but has six far-field microphones to pick up your voice and lights to show when it is listening. Amazon Alexa will work out of the box and you will be able to control with your voice all your Sonos speakers in the home. The speaker will ship on October 24 and will cost $199. Sonos promised that other assistants will come in 2018, including Google Assistant. At launch, the One will support about 80 streaming services, and you can use Alexa voice commands to play tunes from Amazon Music, iHeart Radio, Pandora, and a few other music services right now. Support for Spotify will be added soon, with Apple Music coming at a later date.

Source Sonos

 

  • Speaker vendors are going through a similar phase as watch vendors: when tech brands are entering your space and make product smarter you have to do the same.
  • The advantage for the brand originally in the segment is that they are respected for what they do. Sonos does not have to prove that they can deliver great sound
  • The advantage over smartwatches is that the value proposition for smart-speakers is easier to understand: you can navigate music through voice. Everything else is a plus.
  • The move of supporting multiple assistants should not come as a surprise from a company that sells hardware. Other vendors selling PCs and Phones are doing the same. What is interesting is that Sonos is promising to deliver the option in one device.
  • Empowering consumers to choose which assistant they want to use is much easier of course if you are not invested in one ecosystem. While on paper this sounds great though, the success of the proposition will really depend on how the solution is implemented.
  • If you have to decide which assistant you want when you set up the device and once you have done that you are committed to it, then Sonos is not really doing much different from other brands like Harman that has different products supporting different assistants.
  • What would be very interesting is if they allowed you to pick whatever assistant you prefer for a task. Like Ben was saying in his article yesterday, consumers might want to rely on Alexa for shopping, Google Assistant for Search and Siri for music. In our home where we have access to all Assistants in some shape or form, that is exactly what we do. They are though in different devices today.
  • With tech giants either partnering or delivering their own higher-end speakers it will be interesting to watch how speaker makers like Sonos will keep ahead of the game. Making another comparison between smartphones and cameras, it is easy to see how lower end smart speakers can be affected in a similar way to how lower end cameras were affected by smartphones.

 

What happens when Prices go up and Something Free is no Longer So?

This week Netflix increased the pricing of its monthly plans. The price of the cheapest plan remains at $7.99. The “standard plan,” which allows HD and two simultaneous streams, will increase to $10.99 from $9.99. The highest-tier plan, which supports 4K video resolution and four simultaneous streams, will go up to $13.99 from $11.99.

In other, but related, news Canary, the Home security camera company, updated the features included in its free and paid subscription packages, removing multiple camera abilities that used to be free to all users and placing them behind the company’s $9.99/month paywall. Subscriptions increase to $14.99/month for 2-3 cameras and an additional $4.99/month for each added device.

Via Business Insider

Via MacRumors

  • While these two instances are different in nature the reasons behind the change is the same: higher running costs for the service.
  • Netflix blamed the higher costs of producing content. If you watched the Emmys this year, you could clearly see that this is not an excuse. Netflix did indeed produce a lot of content. Content that took Netflix on top of the list of nominations with 91, a number that went up from 54 in 2016. Netflix was the second-most nominated network behind only HBO (111).
  • These productions are expensive and consumers have now come to expect them. Binge-watching entire series has become for many the new way to watch TV. With competition from Amazon and Hulu strengthening, Netflix needs to stay on top of the production cycle
  • As much as increases are always unpleasant I think consumers can accept them, especially when the return of investment is evident. It also helps when the changes are relatively small like in the Netflix case.
  • Canary’s explanation for the changes is linked to the rising costs of cloud storage in plans appears to consistently state that too many recorded videos went through their platform “unwatched,” leading to a slowdown of the service for some users, as well as “costing Canary a significant amount in cloud expenses.” As such, the company has adjusted the Free Service tier by paring down to ten-second video previews, removing Night Mode, and preventing users from downloading and sharing videos within the Canary app.
  • When at Creative Strategies, we asked consumers about paying for services vs. paying for hardware we found that only consumers who had less disposable income were interested in paying for a service rather than paying a higher price for the hardware. What everybody agreed on, however, was that they did not want to pay for a feature that was introduced after they bought the device. Right or wrong they were expecting that software would evolve and the new features would just be added on in order to maintain the hardware appealing.
  • Canary did two wrongs here and they certainly did not make a right. First, they started charging for features, second, and most importantly, they started charging for features that used to be free. Had Canary asked any developer for the App Store they would have been happy to explain how much consumers are put off by being asked to pay for something that used to be free.
  • When it comes to hardware in the home that tend to have long upgrade cycles, vendors need to be smart at figuring out where the money to finance enhancements, maintenance and so on is coming from. If they know costs will be high, they are much better off being transparent and direct, starting to charge straight away.

Published by

Carolina Milanesi

Carolina is a Principal Analyst at Creative Strategies, Inc, a market intelligence and strategy consulting firm based in Silicon Valley and recognized as one of the premier sources of quantitative and qualitative research and insights in tech. At Creative Strategies, Carolina focuses on consumer tech across the board. From hardware to services, she analyzes today to help predict and shape tomorrow. In her prior role as Chief of Research at Kantar Worldpanel ComTech, she drove thought leadership research by marrying her deep understanding of global market dynamics with the wealth of data coming from ComTech’s longitudinal studies on smartphones and tablets. Prior to her ComTech role, Carolina spent 14 years at Gartner, most recently as their Consumer Devices Research VP and Agenda Manager. In this role, she led the forecast and market share teams on smartphones, tablets, and PCs. She spent most of her time advising clients from VC firms, to technology providers, to traditional enterprise clients. Carolina is often quoted as an industry expert and commentator in publications such as The Financial Times, Bloomberg, The New York Times and The Wall Street Journal. She regularly appears on BBC, Bloomberg TV, Fox, NBC News and other networks. Her Twitter account was recently listed in the “101 accounts to follow to make Twitter more interesting” by Wired Italy.

One thought on “News You might have missed: October 6th, 2017”

Leave a Reply

Your email address will not be published. Required fields are marked *