Two Realities for Voice Speakers

Continuing in my series of publishing some chunks of data from our recent study on smart speakers and voice assistants, I wanted to share what I think are the two most interesting takeaways.

Cloud Based Hardware
Generally speaking, the last few decades of computing have largely been focused on heavy lifting computer hardware where the platform is run heavily on the hardware. Chromebooks are the best first example of a shift away from localized heavy lifting, and more core computing platform is moving to the cloud.

The theory behind a vision for a more thin-client computing world was it would make the cost of the hardware less and thus bring powerful capabilities to more people. Any single piece of hardware will always only have a limited amount of computing resources. The cloud, however, has infinite resources and this is one of the reasons cloud computing platforms are taken so seriously when forming a vision for the next few decades.

If lower price hardware is an indicator of the shift from a hardware-based world to a cloud computing-based world, then smart speakers (HomePod the exception) are right in line. 65% of Echo owners paid less than $50 for all of the Echos in their house. Similarly, with Google Home, 68% of respondents who owned a Google Home paid less than $50 for their hardware. Now, where this gets interesting to me is historically we see pretty terrible customer satisfaction with cheap hardware. But that is not the case with both Echo and Google Home. This is a scenario where, if music and the sound quality was the sole factor in customer satisfaction both these devices would fail miserably. Rather, going beyond music and more of the benefits of the cloud platform is on display. Because of this, we saw decent customer satisfaction from Echo and Google Home which both scored 74%. However, significantly more people selected very satisfied on Google Home, where the majority selected somewhat satisfied for the Echo. That was actually quite telling on whose cloud platform is actually more evolved.

When I look at the customer satisfaction numbers of Google Home and Amazon Echo, considering these are purely voice-based interfaces, it gives us a sense of the value and experience of both Amazon’s and Google’s cloud platform. In other words, those customer satisfaction numbers are less about the hardware and more about the voice assistant and overall cloud computing platform.

Smart Speaker Differentiation

The single biggest new insight from this survey was a behavioral difference between HomePod and Google Home. When looking at the core behaviors, both these products seemed to have a usage pattern that stood out and was more in line with both Apple’s and Google’s strengths. HomePod users were more heavily weighted to music and communication (calling, texting, etc.) than Echo or Google Home. Google Home was more heavily weighted toward searching and general information tasks that each of the other smart speakers. This makes some sense in hindsight. Apple focused on being the best at music, and tightly integrated communication features with iOS and Google is the best at general information searches. Both these products were being used for both their positioning and the dominant strengths of each company. This is where I found Echo the odd man out.

While users of HomePod and Google Home were gravitating toward use cases, both companies are strong at, Echo owners were not exhibiting any overall dominant behaviors. Echo owners were doing most the same things as other smart speakers, but no single behavior outweighed the others in the same way they did HomePod and Google Home. Which causes me to observe while HomePod and Google Home have features they are the best at, the Echo isn’t better than HomePod or Google Home at anything. That could be a cause for concern for Amazon.

More to the point, no single strength of Amazon’s ecosystem was even remotely close to a top behavior. With HomePod and Google Home, the companies strengths were on display, and I can not say the same about Amazon. Things, like purchasing a product, researching a product, or playing an audiobook, were all things less than 20% of Echo owners regularly do. These are things Amazon is best at yet those strengths are not translating to differentiation in smart speaker usage. This should be a concern for Amazon from a long-term strategic perspective. If Amazon’s ecosystem and core strengths offer do not value to this platform, then I think it becomes harder for them to compete against Google and Apple.

Voice Automation
This is our fourth study on smart speakers and voice assistants, and honestly not much has changed. We ask consumers what the most common and frequent tasks are with their voice assistants and I keep hoping we will see some new behaviors emerge. This is still not the case.

The voice as a platform interface is still, simply put, a shortcut. Voice is not offering up any new behaviors or usage models but is rather being used as a convenient way to shortcut a task which would take a few clicks on the smartphone or a task around the house from a smart home standpoint. We can argue that smart speakers have brought more convenience into rooms in the house where the smartphone is not as often used, but the core behaviors remain the same.

People are doing many of the same things they do on their smartphone, and they are simply using voice to eliminate friction and add convenience. To put it another way, smart speakers aren’t necessarily bringing new capabilities, but they are extending the capabilities of the smartphone into new places of the home.

In the end, my biggest takeaway is how poorly positioned I think Amazon is at the moment. With no clear differentiator and no deep tie to the Amazon ecosystem as a differentiator, I think the reason to buy an Echo over something else is greatly diminishing. This is probably why Google appears to be taking share from Amazon from a quarterly sales perspective.

This is not to say Amazon has lost, but rather they need to figure out a way to have their strengths shine on the platform and leverage their ecosystem in a way that gives consumers a clear reason why an Amazon customer should pick an Echo over a Google Home or a HomePod (assuming one comes in at a more affordable price for the masses).

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

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