Amazon, Google cut speaker prices in market share contest: analysts

Amazon.com Inc and Alphabet Inc's Google both discounted their virtual assistant speakers so deeply over the holiday shopping season that they likely lost a few dollars per unit, highlighting a sharply different strategy from Apple Inc as it prepares its HomePod speaker, analysts said.

Both companies cut prices for the smallest version of their speakers, the Amazon Echo Dot and Google Home Mini, to as little as $29 from $50 for the US holidays. Midlevel versions cost a bit more than twice as much.

Apple failed to ship its $349 HomePod speaker in 2017, as it initially planned, and said the device would go on sale in early 2018.

Apple aims to make a profit on the device itself and bolster sales of its $9.99 per month Apple Music subscription, analysts said. Apple's voice assistant Siri likely will focus on recommending new songs.

Amazon and Google, meanwhile, are eager to give consumers a taste of their respective digital assistants, Alexa and Google Assistant, at impulse-buy prices, hoping to lock in customers and profit from later sales of goods and data about buying habits.

The Home Mini and Echo Dot do not match the sound quality of the HomePod, but consumers may see less need for a superior, pricier speaker from Apple once they have a rival set up. Even the midlevel Amazon and Google devices were discounted to $79 over the holidays.

“That kind of pricing is great for consumers and bad for Apple,” said Paul Erickson, a senior analyst with IHS Markit.

Some consumers might consider a $30 speaker to be cheap enough to throw away and not a barrier to buying the Apple device when it arrives.

Amazon declined to comment on Echo devices said but said in a press release it sold millions of its Echo Dot speaker during the holiday season, making it the best-selling product over the period on its online store.