Amazon and Google go to war over smart homes
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Amazon and Google go to war over smart homes

Online retail giant Amazon and search engine market leader Google are two of the world’s mightiest technology companies – and they’re becoming fierce rivals for the smart home market. Amazon was the first-mover, releasing the popular Amazon Echo, and taking the lead in sales. Google is now playing catch up with its own connected speaker and VPA (Virtual Personal Assistant), the Google Home.

Google and Amazon are both outperforming this year

google amazon

SOURCE: Yahoo Finance

Google has a long way to go before it can catch up to the Amazon Echo, which reportedly accounts for 70% of the smart home market today. Amazon’s offering has the benefit of being tied into its increasingly popular and lucrative online platform. What was once a simple online bookseller has now become a one-stop Ecommerce shop, where customers can purchase anything they like. Additionally, with the development of other services like Amazon Video, Amazon Music, Twitch, and others, Amazon has stepped boldly into the entertainment market – and emerged as a major player.

Google’s online platform – particularly, its search function – has benefits of its own, of course. And those benefits may be the key to differentiating their product from the Echo and closing the sales gap. A recent study has claimed that Google Home is six times as intelligent as Amazon Echo. By this, it means that the former product is six times as likely to be able to answer a customer’s question as the latter, probably due to the powerful search engine at its fingertips.

The study was undertaken by New York ad agency 360i, which developed its own software to test both speakers by asking them 3,000 questions and comparing the answers they provided.

With the exception of retail searches (which, unsurprisingly, the Echo outperformed in), Google has a clear lead in terms of the ‘I’ in its VPI. But it can’t wait around for consumers to realize this: Amazon’s Echo will look to shrink the intelligence gap – if Google wants to win the smart home war, it has to close the sales gap in return.

Disclosure

Dominion holds both Amazon and Alphabet, the parent company of Google, in its Global Trends Ecommerce Fund.


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