retail news in context, analysis with attitude

USA Today has a story about new competition in the smart speaker business coming from Chinese tech giant Baidu, which "has made a huge splash in 2019 with their smart display speakers. The company sold an estimated 4.5 million units in the second quarter, up from about 100,000 a year ago.

"To give you a feel for just how out of left field Baidu has come – the company grew smart speaker shipments 3700% year-over-year. That kind of growth helped them take the number two spot by units-sold, outshining Google and fellow Chinese companies Alibaba and Xiaomi." (The story notes that "Alibaba, Xiaomi, and Baidu were all able to grow shipments thanks to a huge surge in interest in smart speakers in China.)

It is a segment that has been dominated by Amazon, which "in the second quarter (had) 6.6 million shipments, up 61% year over year." That gives Amazon "about 25% of the market."

Interestingly, USA Today writes, "the story is a little murkier for another U.S. tech company – Alphabet's Google. They've historically been #2 in the rankings, playing the Robin to Amazon's Batman. Recent data shows Google's grip on the smart speaker market is slipping. Google was the only major company to show year-over-year declines in devices sold, and saw their market share nearly get cut in half from where it was in 2018."

One company that seems not to be playing in the same league as these others is Apple, and the story suggests that the reason may be structural: "Apple is largely a hardware company and it shows with its smart speaker approach – the company's HomePod retails for several times the cost of devices from Amazon and Google. Some of that is classic Apple premium pricing, and some of it is driven by the fact that Apple is in a position where it needs to make money on its device sales, while other companies are willing to sell smart speakers at or near cost because they plug into a larger platform strategy."
KC's View:
To me, Amazon will have the advantage in this segment for the foreseeable future because it not only can link the user to a larger ecosystem (which, let's face it, Google can, too), but because the results of those connections are tangible … and, as people get more and more used to making purchases via smart speakers, result in tangible results - stuff that shows up at your door.