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Amazon and Google Are Practically Giving Away Smart Speakers. Here’s Why.
It’s not about giving you a deal
This holiday season, both Amazon and Google are selling their smart speakers for so little that they’re basically giving them away, or in some cases, partnering with other companies to actually give them away.
Amazon’s Echo Dot and Google’s Nest Mini speakers usually retail for $50, and Google Home Minis usually retail for $25, but in recent weeks they’ve been included for “free” or at an extremely reduced price with the purchase of other items. Spotify is giving away Google Home Minis to its premium users. Tile is throwing in a free Google Nest Mini with the purchase of its tracking stickers. Amazon Music Unlimited subscription comes with the option to buy an Amazon Echo Dot for 99 cents. Google has also packaged a Frozen II book together with a Nest Mini, which can read the story along with you.
It is so easy to acquire a smart speaker that it’s possible you’ll do so almost by accident. Even if you aren’t interested in “smart” devices for yourself, the deals are good enough that you’re likely to pick one up anyway and gift it to a friend. I have more than enough smart speakers in my home, but I seem to keep ending up with extra Nest Mini’s that get thrown in with something else I’m buying, such as extra cloud storage — to the point I’ve given away multiple speakers to friends.
There’s a reason Amazon and Google are making it so easy to end up with a smart speaker — and it’s not about giving you a deal.
These companies have built their dominance on the idea that people will use web browsers to navigate to Google.com and Amazon.com, but they believe that the day when people instead use their voices to search the web and make online purchases is coming soon. And they’re locked in a battle to be sure that their speakers are the ones fielding those requests.
Winning the smart speaker competition is especially important for both Google and Amazon. If we all start using voice for search, that poses a problem for Google, which would miss out on a typed search traditionally made on a phone or laptop, where the company can run advertising. For Amazon, that’s an opportunity to make an end run around the search giant, which has sat between Amazon’s storefront and the consumer for more than a decade.
The true cost of smart speakers is our data, privacy, and loyalty.
Once they’re set up, smart speakers fade into the background. They allow companies to suggest the services you interact with. If you ask Alexa to “buy soap,” by default it’ll purchase it from Amazon, which streamlines the process but reduces competition. When you connect your Google account to Google Home, it automatically links your Google Play Music account.
Amazon and Google are willing to sell their smart speakers at a low price that almost guarantees they’ll lose money on the transaction because they’ll almost certainly make that money back with your data and future purchases. Plus, whichever device you buy first means you’re more likely to use the services it suggests to you — at least until you buy or acquire another smart speaker device.
They both believe that customers, in general, will behave as I have: After purchasing a Google Home when it launched two years ago, I’ve stayed loyal to the company’s devices since. I don’t own any Alexa devices, nor am I interested in them. So Google Assistant has received thousands of questions and commands from my family that Amazon is missing out on.
This model isn’t new: Amazon has sold its Kindle e-readers at a loss for years because it ultimately recoups the cost of the device through the high margins on e-books that customers ultimately wind up buying from the company. Amazon is the exclusive retailer of books on the Kindle, locking in years of sales.
When the world’s largest tech companies are dangling “cheap” useful devices in front of us, it’s worth keeping in mind that the true cost of smart speakers is our data, privacy, and loyalty. Before you gift one to a friend this holiday season, consider that doing so gives Amazon or Google a way to access their data, wrapped in a cute way to play music and get the news.
