Outside the US, the Amazon Echo speaker is still a product that flies under the radar. Not a surprise, since it hasn’t launched outside the US yet.
The initial Echo went on sale Stateside in November 2014, a few months after the much higher-profile launch of Amazon’s first smartphone, the Fire Phone.
The latter was a significant flop, but the Echo has been an increasingly not-so-quiet success – and also a pivotal product to consider when thinking about how people will listen to music in the future. Here’s our primer on why.
What is the Amazon Echo?
Amazon’s pitch for the $179.99 Echo is “a hands-free speaker you control with your voice”, which summarises it neatly.
The cylindrical speaker has Sonos-style features to connect to a Wi-Fi network and stream music from Amazon’s own Prime Music as well as Spotify, Pandora, iHeartRadio and other services.
The Echo also has seven microphones built in that are constantly listening for voice commands from its owner, with the command ‘Alexa’ waking the device up for further instructions. Alexa is Amazon’s voice-controlled assistant technology – more about that in a minute.
Since its launch, the Echo has been joined by two cheaper sister products. The $89.99 Echo Dot is Amazon’s equivalent of Google’s Chromecast Audio: it plugs in to existing speakers to connect them to the internet and stream music, complete with Alexa. Amazon Tap, meanwhile, is a $129.99 portable speaker.
What is Amazon Alexa?
The easiest way to think of Alexa is as Amazon’s equivalent to Apple’s Siri: a voice-controlled artificial assistant that responds to your voice commands.
On the Echo, that means it can tweak the volume (voice command: “Alexa, turn it up”); skip tracks (“Alexa, next song”) and access the Prime Music catalogue (“Alexa, play Adele on Prime Music” or “Alexa, play the Sunny Day Classical playlist”).
Alexa is about much more than music though. It’s capable of understanding a growing range of commands, from controlling other smart-home devices and ordering products from Amazon’s online store (“Alexa, order AAA batteries”) to providing cinema times, weather forecasts and sports scores.
Alexa also has “skills” that can be developed by other companies and added by Echo owners according to their needs. Amazon hopes that businesses and services will develop Alexa skills as they’d develop smartphone apps.
StubHub’s Alexa skill enables people to find out about local events in its database (“Alexa, ask StubHub what’s happening this weekend”); Lyrical identifies song titles from snatches of lyrics (“Alexa, ask Lyrical what song has the lyrics ‘we will rock you’”); Uber has a skill to order a car (“Alexa, ask Uber to request a ride”) and so on.
The unofficial Alexa Skills Store website is a good guide to the growing catalogue of Alexa skills, which passed 1,000 in June. The idea is that each person’s Echo will be unique, because it will have the skills installed that they have chosen.
More than 40% of Echo owners are using it as an information provider responding to questions according to Consumer Intelligence Research Partners, while nearly 20% are using it to control other devices.
How many units has Amazon Echo sold?
You’d better sit down for this shock news: Amazon hasn’t given an official figure for Echo sales. The company loves to keep sales data close to its chest, but some analysts have been trying to plug the gap.
In April 2016, Consumer Intelligence Research Partners estimated that Amazon had sold 3m Echo speakers in the US since launch, with 1m of them sold during the 2015 holiday-shopping season. “Echo sold steadily throughout 2015, and as Amazon ramped up promotion, it sold even better at Christmas,” said CIRP’s Mike Levin.
In June, Kleiner Perkins analyst Mary Meeker claimed that Echo sales had risen to 4m units since launch. Meanwhile, research firm 1010data claimed earlier this year that in 2015, Amazon devices (i.e. Echo) accounted for 25.9% of all speaker sales in the US – ahead of companies like Bose and Sonos.
And in 2016? Tech site The Information recently claimed that Amazon is aiming to sell 3m Echo units in 2015, and 10m in 2017. Both may be conservative estimates, especially if Echo goes on sale elsewhere in the world before next year.
In her annual internet trends presentation, Meeker claimed that while 61% of Amazon’s US customers are aware of the Echo, only 5% own one: meaning there is plenty of room for growth within the company’s existing customer base.
What is the competition?
In direct hardware terms, the main competition so far has been the kind of connected speakers sold by Sonos, except that they don’t have the voice-control and AI assistant technology.
Indeed, Sonos CEO John MacFarlane has admitted that the Echo’s success is a near existential challenge for his company, although Sonos has yet to reveal specific products to compete with it.
“The Echo found a sweet spot in the home and will impact how we navigate music, weather, and many, many other things as developers bring new ideas and more content to the Alexa platform,” wrote MacFarlane in March. “Alexa/Echo is the first product to really showcase the power of voice control in the home. Its popularity with consumers will accelerate innovation across the entire industry.”
Google is also gearing up to take on the Echo with its own voice-controlled speaker called Google Home (pictured above), which was unveiled in May, and will go on sale later in 2016.
“Google Home is a voice-activated home product that allows you and your family to get answers from Google, stream music, and manage everyday tasks,” is the description on the Google Home website, positioning it as a direct rival to the Echo.
“We’re competing feature for feature in most of the areas. And in the areas that really matter to the consumer, we’re going to do a better job,” Google’s VP of product management Mario Queiroz told The Verge.
South Korean telco SK Telecom is also working on a connected speaker with built-in AI assistant. “SK’s first AI speaker, which is similar to Amazon’s Echo, could be released in the latter half of the year,” SK’s Park Myung-soon told the Korea Times in July. SK has already partnered with music-streaming service MelOn, which has 29 million listeners in South Korea.
Meanwhile, French startup Whyd, which started life as a service bridging the gaps between different music-streaming services, is currently pivoting to focus on its own Echo-style device: “a premium voiced controlled speaker that will surround you with its deep and powerful 360° sound” as the company put it in an email to users.
What will Amazon’s next moves be?
Amazon has more than 1,000 staff working on Alexa, which is moving beyond the company’s own devices. It’s also available through the Triby family hub (pictured above), the Nucleus intercom, the Pebble Core wearable and CoWatch smartwatch for example. Ford is exploring the potential for putting Alexa in its cars too.
Amazon is expected to explore other kinds of Alexa-powered devices itself, too. Headphones, for example: an Amazon patent filing for noise-cancelling headphones that listen out for specific sound patterns spurred expectations of Alexa in headphones earlier this year.
The company also recently made a push for a new content category on the Echo: games. In August it launched a tool to help developers build “interactive adventure games” for Alexa, suggesting that they can “showcase original content or build compelling companion experiences to existing books, movies and games”.
Most interestingly from Music Ally’s perspective, however, the Echo is expected to be a key plank in Amazon’s plans to launch a standalone music-streaming service – i.e. one not dependent on being a member of its Prime scheme.
The first rumours of this emerged in January 2016 in the New York Post, which claimed Amazon was working on a “Spotify-killer” that would cost $9.99 a month, but perhaps $3-$4 less if bundled with an Echo.
Reuters followed up in June with its own report backing the $9.99 price, but also stressing the ties to Echo: “The new music offering also is intended to increase the appeal of the Amazon Echo,” claimed the report.
In its own follow-up, Billboard suggested that owning an Echo “would bring pricing down to $3 to $5 monthly – but listening would be limited to that Echo device” – something backed up by chatter from Music Ally sources, although it is unclear how rightsholders have reacted to this plan.
What’s certain is that Amazon has grand ambitions for its Echo device and Alexa technology. Its bullishness can be seen in its willingness to embrace comparisons to popular science-fiction.
“The longer-term vision is a little bit like the Star Trek computer. Captain Kirk or Picard could sit on the bridge and ask anything and get the right answer,” said Amazon’s SVP for devices David Limp earlier this year.
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