Amazon is getting serious about its voice-controlled speaker Echo, and it just made a move that will make Echo a bigger part of its business.
On Thursday, Amazon released two new models of the Echo — Echo Dot and Amazon Tap — that will give more choices to its customers, and ultimately, expand its uses around the home.
Echo has been selling like hotcakes since its debut in November 2014, and has grown a cult-like following. It’s basically a home digital assistant that can do a lot of different things from playing music and controlling the lights to reading the news and calling an Uber for you.
The new versions of Echo shows that Amazon sees a big opportunity in the gadgets and is doubling down on its strategy to turn the Echo into a central hub of every customers’ home.
“It’s almost unprecedented in the history of Amazon to see this much demand and this much love for a product,” said Amazon’s SVP of Device David Limp at a press event. Amazon doesn’t specify how many Echoes it has sold, though the devices have appeared at the top of the company’s list ob best-selling products.
Here’s a quick run-down of the two new products:
The Echo Dot is a hockey-puck sized device that has the same capabilities as the regular Echo, only with a weaker speaker. Instead, it can connect with external speakers through a cable or Bluetooth. The goal isn’t to replace the bigger Echo — rather it wants to be a supplementary second Echo device at home, used in places like your bedroom as a smart alarm clock.
Amazon clearly sees the Echo being used all over your home, and it seems to be testing the idea of expanding its market by first targeting the existing userbase with a cheaper, down-sized version with the Echo Dot. It’s why the Echo Dot is exclusively sold to current Prime members through Alexa Voice Shopping, the voice service that’s only available through the Echo or Fire TV.
Amazon Tap is the portable version of the current Echo. It’s basically a scaled-down version of the Echo with longer batter life. It’s about the size of water bottle and only gets activated when it’s tapped in order to save battery life. The regular Echo and Echo Dot get activated when the user calls it by voice, which consumes a lot of energy because the device always needs to be on standby mode.
With the Tap, which can easily fit in a backpack, Amazon may be exploring the idea of taking the Echo’s capabilities beyond the boundaries of the home. In any case, it will continue to do what it does best: collect data about user behaviour and become an easy gateway to Amazon’s e-commerce site.
Both devices are available for pre-order Thursday and will start shipping March 31. The Echo Dot costs $89.99 and Amazon Tap is $129.99.
The next billion-dollar opportunity
Echo’s popularity has certainly caught many people by surprise. It’s ability to listen to conversations all the time caused major concerns at first, and it wasn’t entirely clear how the device could be used at home.
But it’s clearly catching on as Amazon said it was the top-selling device priced over $100 on Black Friday. It was also one of the top 5 items ordered on Christmas Eve through Prime Now.
Limp, the Amazon SVP of Device, said even Amazon was surprised by all the different ways people started using Echo. There are now millions of developers working on Alexa, Amazon’s Siri-like voice technology that powers the Echo, and over 300 “skills,” or apps, available. Plus, there are over 20,000 5-star reviews of Echo on Amazon, which is why Limp is so bullish on the Echo’s future.
“At Amazon, we believe the next big platform is the voice,” Limp said. “What we’re trying to do is to build a computer in the cloud that’s completely controlled by your voice.”
Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.
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