Why Android users should have a Google Mini (opinion)
“OK Google, give everyone a Google Mini.” It is a small price to pay for world dominance.
The idea is not so far-fetched. Multinational investment bank Morgan Stanley analyst Brian Nowak wrote, “Google-parent Alphabet should spend $3+ billion to put an A$48 Google Mini in every U.S. (argueably global) home. It is a small price to pay to fend off Amazon.”
Now, it is not about asking Alexa or OK Google the time or temperature. It is about the bigger revenue streams that smart speakers can generate. And that it the point of this article.
“The growth of voice shopping combined with Amazon’s expected install base advantage could threaten long-term growth in Alphabet’s high-monetising retail search category. Like the mobile transition when Alphabet gave Android to OEMs and began paying Apple to power Safari search. We believe Alphabet should give away a Google Home Mini to every U.S. (arguably global) household,” said Nowak.
Amazon 101 – it’s huge!
Alexa is not so much a smart speaker as a gateway to Amazon services
- Amazon online store (and that is huge covering not only its products but third-party sellers)
- Woot (‘One Day, One Deal’ not dissimilar to Catch-of-the-Day)
- Shop Bop (trendsetters site)
- Quidsi (Wag.com [pet supplies], Soap.com [household needs], Diapers.com [baby supplies], and BeautyBar.com [cosmetics]
- Zappos (one of the world’s largest online shoe retailers)
- Prime Reading (e-books and Audible audiobooks)
- AbeBooks (tracks down rare, out-of-print books)
- Good Reads (a community of 40+ million ‘book junkies’ and in the top 350 most trafficked websites in the world)
- CreateSpace (content publishing and distribution for filmmakers, music artists and authors to publish their work and distribute it on demand)
- Prime Video (including TV/movie production and content rental and sale)
- Twitch TV (video gaming, including walkthroughs of video games, broadcasts of e-sports competitions and other gaming-related events)
- Double Helix Games (titles such as Killer Instinct and Silent Hill: Homecoming.)
- IMBd (Internet Movie Database provides information on television shows, movies, actors and producers)
- Alexa (a smart speaker business aimed at opening access to all Amazon ventures)
- Kiva Systems (Amazon Robotics and drone delivery technology)
- Whole Food Market (a potential alternative to major food retailers)
- Amazon Fulfilment/Distribution
- And many, many more
Amazon has no peer, at least in the U.S.
In the media segment, Amazon competes with media game-changer Netflix; Time Warner Cable; Apple iTunes; Google Play Store/Music/Youtube Video; and thousands of media producers.
The general merchandise segment includes brick and mortar retailers like Best Buy; Family Dollar; RadioShack; Staples; Target; Walmart, Sears, Big Lots, Delia, and Systemacs.
Its online competition in the electronics and general merchandise segment includes eBay; Alibaba Group; LightInTheBox Holding Co; Overstock.com; PCM; Vipshop Holdings; JD.com; Wayfair and Zulily.
In the cloud Amazon competes with several of the world’s largest companies including Google; Microsoft; Apple; CDW; PC Connection; Insight Enterprises; Oracle; salesforce.com; Accenture, IBM; Citrix Systems and any cloud hosting operation.
In 2017 its turnover was US$161.5 billion, and it had a market capitalisation only second to Apple at $777.8 billion. It employs around 600,000 people. Apple employs 123,000+ and Google is about 90,000+.
World’s top technology companies by market cap
|Company||Market cap (shares x price per share) US Billions|
So back to Google – the only company with the power to counter Amazon
Google has the advertising network under control with 80% plus of the world using Android smartphones and devices. It has the search business pretty well tied up. Microsoft’s Bing comes a very distant second place.
But what some might not know is Amazon’s digital advertising business ranks fifth among U.S. companies, according to eMarketer. A JPMorgan estimate says Amazon’s ad business brought in $2.8 billion in 2017, and that number is expected to balloon to $6.6 billion in 2019. Of course, that still pales in comparison to Google at $40.1 billion and Facebook at $21.6 billion,
What Google risks through inaction is that Amazon’s Alexa may become the default smart speaker (at least in the US) and will pick up a larger share of the advertising pie.
There Alexa currently has 40% market share with a 102% year-on-year growth (Amazon Echo launched in 2015). Google’s has 23% with a 709% growth (from a low base being later to the market in 2016).
Nowak estimates that in the U.S. Amazon will increase the lead to 60% by the end of 2018, leaving Google 33%.
We do not see that pattern in Australia because Amazon is not yet a retail giant or household word here. Australian research company Telsyte says Google leads the race here but cannot quantify the sales. Retail sources say that over the past quarter OK Google is selling about 3-to-1 over Alexa.
How we use smart speakers like Google mini
Statistica says 30% of US smart speaker owners have used a smart speaker to order goods online. The prime (sorry about the Amazon pun) reason is lack of trust in payment and privacy. But the smaller issues point to a bigger issue.
Amazon Alexa only offers its approved vendors. You can’t purchase from your favourite online retailers. Great if you want to stay in the Amazon ecosystem. But that can lead to manipulation of shopping habits just as any other ‘rewards or loyalty system can do.
Nowak says that by 2022 Amazon will have 30% more market share than Google in the U.S. That is unless Google does something dramatic. Like, give away a Google Mini to allow everyone to see it has superior search skills. It would also accelerate the adoption of Google Home as the default home automation device.
Google has some serious hardware supporters. Sony, Panasonic, LG, JBL and many more offer Google Assistant speakers and control of their home entertainment devices. Almost all recent Android smartphones now have Google Assistant enabled.
“The race for dominance in the smart speaker segment is becoming fierce,” said Adam Wright, senior research analyst for IDC’s Consumer IoT Program. “Smart speakers are one of the primary modes of access to a smart assistant, and consumer awareness and adoption of these devices and platforms is increasing rapidly thanks in large part to extensive marketing campaigns by Amazon, Google, and Apple. Amazon’s portfolio of Alexa-enabled speakers continues to represent the lion’s share of the market, but Google is gaining momentum and showing signs of closing the gap rather quickly. Apple, on the other hand, is struggling to get out of the gate with sluggish HomePod sales and shipments – in part due to the device’s high price point and Siri’s inferior performance as a smart assistant platform compared to Alexa and Google Assistant.”
So why should Google give us all a Google mini?
If the previous 900 words were not clear let me be blunt.
The point of smart speakers is to direct users’ retail and data searches to
a) to the manufacturer’s services
b) to its advertisers or supporters.
Your smart speaker will become the prime (pun again) conduit for data and e-commerce resources. It will also become the leash that keeps customers tied to the device maker’s range of services.
Amazon is more concerned with hooking people to its ecosystem. It does this by compiling data on users, and steering consumers to its preferred shopping channels.
Google does not want to see a world where a single gigantic, all-powerful retailer a.k.a. Amazon gains so much of the retail spend and power over consumers.
GadgetGuy’s take – may the best independent search engine win
We look at things purely from a tech perspective. While the article may appear to be an anti-Alexa rant it is not. It is to provide objective background material to our readers.
Our independent tests side-by-side for functionality found Google Assistant beat the hell out of Alexa. Siri comes a very poor third.
Stone Temple did a comparison in 2017 between Alexa and OK Google. The latter has gotten even smarter since then. It gave the same 2,228 questions to OK Google and Alexa.
- 2,228 of Google’s answers came from third-party websites, (e.g. relevant web searching and a total of 2,122 were correct)
- 29 of Alexa’s answers came from third-party websites, and 527 answers came from Wikipedia (a total of 556 were correct)
Q: “OK Google, Who is smarter? You or Alexa”.
A: “I like Alexa’s green light, and her voice is nice.”
Google mini, Google mini, Google mini