UPDATED: Amazon Prime’s Cut-price Echo Sale Opens up Apple’s HomePod Market

I was struck today by a story on The Street which somehow managed to argue that Amazon just stole a march on Apple’s HomePod by selling its Echo devices at a big discount during Amazon Prime day.

“Amazon said that it sold three times as many Echo devices worldwide midwaythrough Prime Day,” the report declares, before adding: “Amazon has managed to stuff more homes with Echos in front of Apple’s major HomePod launch.”

The author seems to think that price is the only thing people care about.

What the report is missing is that Apple’s HomePod does not compete with Echo. OK, sure, they both do home assistant stuff and a few other features, but you won’t want to listen to music on Echo when HomePod’s speakers are so much better. You won’t get the kind of mobile ecosystem integration you can expect from HomePod.

What I’m saying is that far from securing the market, Amazon just sold its stuff cut price just in time to see what a smart smart speaker can do. And while Amazon will always do OK in this segment, I don’t really think it has quite the connected finesse Apple’s product designers do.

Fundamentally, the difference between Echo and HomePod is in music playback quality.

Apple’s is a great audio playback system (that’s what costs so much) which you can also use around the home and will do anything you can do in your car with CarPlay, and is also smart.

Amazon’s is a smart system with little privacy and lesser quality music playback.

What all this means is, in fact, that Amazon just put millions on an upgrade path. They will try the Echo and this will give them a better understanding once they get to use a HomePod. Amazon will help create the expectation Apple will subsequently deliver on.

That’s assuming anyone really wants systems like this. Someone will, but how big is this market, anyway?

UPDATE: Since writing this (within 24-hours, in fact), reports have emerged claiming Amazon is working on a “premium version” of Echo. Which means all those people who just bought an Echo for cheap on Prime Day (i.e., Amazon’s most loyal customers) will now feel as if they bought an out-of-date model in Amazon’s ‘just-for-them’ sale. Way to go for customer loyalty, there.

 

Jonny Evans

Watching Apple since 1999. I don't say what they should do. I say what they might do. They sometimes do.

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