Wednesday in CE: Amazon and Google Took a Loss on Holiday Smart Speaker Sales, Probably
It's always fun to chase the numbers after holiday sales especially since our audience indicates that their confidence has never been higher.
Despite the general pulse being a positive one, Amazon and Google offered deep discounts on their virtual assistnat speakers that probably generated a loss per unit highlighting a sharply different strategy from Apple Inc as it prepares its HomePod speaker, analysts said, who apparently hope the wide margins will be enough profit rather than a deeper investment in data.
The answer to the simple 'why?' is, as always will be, data.
For a while, Amazon has been a big data company despite making billions of dollars shipping merchandise around the world. Google has been following that trend as well, rolling up into parent company Alphabet Inc. Alphabet has many investment vehicles that help it keep a watch on tech built beyond the Googleplex, including GV, CapitalG, Gradient Ventures, and strategic investments made out of its corporate arm and individual business units. Google's venture arm GV now has $2.4 billion in assets under management and aims to invest about $500 million per year in start-ups.
The Home Mini and Echo Dot do not match the sound quality of the HomePod, but consumers may see less need for a superior, pricier speaker from Apple once they have a rival set up. Even the midlevel Amazon and Google devices were discounted to $79 over the holidays.
"That kind of pricing is great for consumers and bad for Apple," said Paul Erickson, a senior analyst with IHS Markit.
Some consumers might consider a $30 speaker to be cheap enough to throw away and not a barrier to buying the Apple device when it arrives.
So is the loss a big deal for Amazon or Google? Well, probably not. They can muscle through it. However, Apple arriving late to the game might translate to slow profit despite how promising the HomePod could be.
"Apple is in a bit of trouble," said Adam Wright, senior research analyst at IDC, who estimated that about 35 million smart speakers had been installed worldwide as of a couple of weeks ago - not including U.S. Christmas sales. "We’ve witnessed an explosion in the last six months."
Roku Distancing Themselves as King of Stream
Roku is shaping up to be one of the most interesting companies in the age of streaming. Google, Nvidia, and Amazon have all provided their options, in Chromecast, the Shield, and Firestick respectively, and lesser options appearing and going as the market grows.
But Roku is doing something a little different. They are teaming up with TV OEMs, namely TCL, Sharp, Hisense, RCA, Hitachi, Insignia and, as of today, Magnavox. But the plan isn't just to bake their software into the TV and call it a day, they want to control the entire home audio experience a la Google Home and Amazon Alexa.
Their new venture in to voice control, simply called the Roku Entertainment Assistant and woken by saying "Hey Roku", it's an ambitious project that is paying off for competitors. This all of course underscores their plans to build Roku-powered speakers that will all play nice inside their own ecosystem.
Between their refresh last year and these new ambitious plans, Roku is really shaping up to be one of the most productive streaming services in a market that is waiting for someone to take the lead.
Best of the Rest of the Net
- A massive, mysterious security flaw in Intel processors is forcing a redesign of the kernel software at the heart of all major operating systems. Since the issue lies directly in Intel’s x86-64 hardware, Windows, Linux, and Mac all need to protect against it. And worse, it appears that plugging the hole will negatively affect your PC’s performance.
- Microsoft has ended production of the Kinect Adapter, the USB accessory that is required to connect the Xbox One Kinect sensor to an Xbox One S, Xbox One X or Windows device, the company confirmed to Polygon today.
- It’s a couple of weeks since LG announced its upcoming 34-inch ultrawide Thunderbolt 3 monitor, and now Samsung has done the same. While LG has the higher resolution – effectively between 4K and 5K – Samsung is hoping that its curved design will win fans.