Amazon, Google and Apple are all trying to become the fundamental mechanism to interact with your home, but Amazon advantage is significant. has just announced , while Google is expected to launch a and soon, and . Amazon a lot of new Alexa devices (6 in total) new cheaper Google Home maybe a high-end model Apple will launch HomePod in December All these plays are not just about selling hardware, but about changing the way we do things at home and how we interact with computers. Voice interaction is the critical element, with Amazon’s Alexa, Google’s Assistant and Apple’s Siri being at the front. Each of these companies want to create the standard by which home entertainment, home communications and home automation evolve. The Home Operating System. Amazon is currently , so let’s take a look how they are winning the battle to become the standard in each of these categories. taking 70% of that market The Home Entertainment Front — Music The presentation of the Echo line, the Google Home and the upcoming HomePod as “smart speakers” puts a lot of weight into the offering as part of the value proposition. And here a difference is already clear: music Apple is betting on the strength of Apple Music as part of their offering, and it is the central feature in . the current promotion of HomePod Both Amazon and Google are going a different way, enabling their own music services in their devices (Amazon Music and Google Music respectively), but also being open to other services like Spotify and Pandora. And currently the market reach from supporting Spotify significantly excedes Apple Music: Tying the HomePod to Apple Music may make it attractive for current Apple Music subscribers but, on the other hand, not being able to use other music services on it means an additional investment of $120/year for the Apple Music subscription. And that can be too much, specially for users that are already paying that amount to get a Spotify subscription. While this is still a quite open battlefront, and Apple deep knowledge of the music market may create some advantage for HomePod, I think addressing a bigger user base with Spotify is key, and until Apple opens the HomePod to support third party music services it will be at a disadvantage. : Between Amazon and Google, the advantage is currently on Amazon Firstly on price, with the $99 price point for the new Echo. Then the , which becomes more interesting considering . multi-room support the $50 discount on a three Echo pack And lastly on the existing , while . support for Alexa and its music services in speakers from other manufacturers Google Assistant has announced it but still has none Maybe this will change and with new Google Home devices, and other manufacturers like Sonos supporting Assistant and not Alexa, but currently Amazon is ahead. The Home Entertainment Front — TV But if the aim is to become the Home Operating System, music is not enough, as the TV is the device currently centering the entertainment experience in the living room. And that is why these companies are also introducing their voice-controlled assistants there: Google with its Chromecast, which integrates with Google Home. Amazon, with the newly announced Fire TV that supports Alexa interaction. And can be controlled from an Echo. Apple TV, which . supports interaction via Siri using its remote None of them are leading the connected TV market, , but both Amazon and Google are close. And , thanks to the ability for third parties to provide skills/actions for their respective ecosystems. that place belongs to Roku both Alexa and Google Assistant can be used to control a Roku Apple is way behind, and the analysts response to the latest Apple TV 4K is that , which is another opportunity for the or the to reinforce their position. the value is not enough to justify the premium pricing Chromecast Ultra new Fire TV 4K But Amazon has another advantage here, with their Echo Show device, because while not intended as a replacement for a TV, it can be used to consume video content. And that is also probably part of the reason why . Google is currently blocking YouTube access from the Echo Show The Communications Front Communication was a functionality that both Amazon and Google initially left out of their respective connected speakers. But they have realized that . communications are a very relevant part of the experience for a device aiming to become a Home OS That is why both companies have recently launched communication capabilities in their devices, but with very different approaches: Google Home lets you call any US or Canada number. Amazon launched their Alexa Calling and Messaging service, allowing calls and messaging between Echo devices. And now Amazon has also extended their offering to match and surpass Google’s proposition. Now Echo will and Canada, but on top of that has launched a new device, . also support the same free calls to the US the Echo Connect, which allows to plug your Echo to your landline phone, so that you can make and receive any regular call with your existing number This is an interesting approach that might bring more use to the dying fixed lines, and that instantly makes the Echo a device that can reach or be reached by anyone in the world. And there is still the open question about the rumors around an Amazon Anywhere communication service, that . I believe would make much more sense if available in the Echo too Apple offering in communications for its HomePod is still to be seen, but it may have an opportunity here. , which provide . And not only that, but they can also leverage their existing position with iPhone and its integrations with operator’s networks and do something . Using their Wi-Fi Calling for iCloud devices capabilities, they could get the HomePod to make and receive the calls and messages of the main iPhone line. They would need to address the multiple users/identities issues (the iPhone is a personal device, while the HomePod is a family one), and make sure presence is considered to avoid privacy problems, but solving this could get them a great differentiation in value. Apple controlling the phone, , can bring some advantage to them. Apple could leverage iMessage and FaceTime audio a quite popular communication network similar to what they are doing with the LTE Apple Watch which Amazon has not been able to do But, in my opinion, the defining element will be openness, which can enable relevant communication players into these devices. It is probably more interesting to get WhatsApp or Facebook Messenger in your smart speaker than the decaying SMS (and even if there are rumors that Facebook is building their own device, ). I believe the more relevant bet for them would be to ensure their presence in the existing ones But Apple has not yet opened HomePod to third party applications, and Google is not providing notifications support, which prevents any reasonable communication application there. , which opens the opportunity for messaging, and . Amazon has already enabled notifications in Echo for third party services I expect they will allow VoIP calling too at some point And what about video communications? Apple could leverage their FaceTime network here, but it is Amazon that has already two devices (the Echo Show and ) that offer this service. And . now the Echo Spot Google may be planning something there too So in summary, the overall advantage is for Amazon, but let’s keep a look at Apple’s play with iMessage and Wi-Fi Calling. The Home Automation Front Home Automation, also known as Smart Home, is a quite open scenario too. The main barrier is that having smart devices that can be controlled is still mostly a hobbyist market. Technology curiosity is driving demand, rather than an actual customer need. But the expectation is that technology becoming simpler will make the convenience value to be better perceived, and drive mass demand for the Smart Home. That is why Amazon, Apple and Google are betting on this, and their smart speakers are prepared to control these smart devices. The approach, though, has been slightly different for each player. Apple has focused its efforts around their own standard initiative: . The problem with this approach has been the required hardware adaptations for devices, which has left many manufacturers out of their ecosystem for a while. For instance, Belkin’s WeMo is currently not supported, and , making adoption that more difficult. Philips Hue System, a product frequently featured in the Apple Stores, . This limitation has become so obvious that Apple has already announced that . HomeKit Belkin has announced an additional device will be required to connect via HomeKit had to issue an upgrade (that customers had to pay for) for its hardware bridge to be compatible with HomeKit in iOS 11 the requirements to connect to HomeKit will be simplified and rely on software On the other hand Amazon has worked to support as many devices as possible via software with the out-of-the-box Echo device and through their Alexa cloud, and has also allowed developers to . create Skills that can connect to any device Google Home’s approach has been similar, both working with specific partners and providing APIs to create “ ”. And although Google does sell their own home Smart Devices, through , this is currently not making a real differentiation in becoming the Home OS. The reason is that these devices are not providing Assistant functionality (while t ), and in fact you can actually too, which simply makes them another element of the ecosystem that both players benefit from. Google Actions for SmartHome apps their Nest brand here are Nest competitors that integrate Alexa control them via Alexa But Amazon is now making a huge difference with their new Echo Plus. Not only the device incorporates hardware to behave like a SmartHome Hub (which reduces the number of gadgets users would have to buy to control their home), but it actually includes a Philips smart bulb in the box. This way, by just buying the Echo, customers get a “gateway drug” into home automation. I would have suggested also adding an IR emitter function to the Echo device, so that without having to buy anything else, customers could also control devices already in their home, like their TV, Home Theater system or Air Conditioning. This could further create the appetite into control and automation, accelerating this market. And if we also consider that Alexa is already available in other smart devices, , like the Ecobee Smart Thermostat we can see how in this field the advantage is also for Amazon. Alexa-powered Ecobee Thermostat The Shopping Front But the main reason why Amazon wants to become the Home Operating System is because being the center of what happens around the home makes them also the main provider for the things that need to be bought there. And this space is where Amazon strength is much superior to the rest, because retail is at the heart of their whole operation. Buying things from Amazon using the Echo products is not only simple, but the core of the functionality. And , which they are already , will only make this fully-vertically-integrated model more powerful. their recent acquisition of the Whole Foods chain using to sell more Echo devices Obviously that is why , so they can also provide this value to customers. This is a smart move, but it Google is trying to follow up by making a deal with Walmart reinforces how Amazon is still at the lead. Apple does not have anything like this, and unless something is announced in their official presentation of the HomePod, that will leave the value of their device as a Home Operating System way behind. The Openness Front Throughout this post, the relevance of opening the Home OS model to developers and other partners has appeared constantly: The current advantage of Amazon in Home Entertainment comes from their Spotify support, their ability of theirs Skills to enable Roku control or their licensing of Alexa to be integrated in other smart speakers. Their communications advantage comes from connecting to a standard communications system (the traditional phone line) and the expectation of new communication applications appearing as Skills. The Smart Home advantage is coming from their Skills enabling any device to connect to Alexa, and the ability of other device manufacturers to integrate Alexa in their own devices. !! Including some really unusual ones Not sure if Alexa here is really a good idea… This is leaving the (initial) Apple approach behind, which will have to accelerate their plans to open the HomePod to developers. Google understands this is critical, and that is why they are trying to get developers to embrace . But the complexity of the approach of Assistant as a chatbot vs Assistant as “conversations with a smart speaker” is making this more complicated than the focused Alexa Skills approach. creating actions for their Assistant And let’s not lose sight that this is a competition too, because just being open does not drive developers: they need to see the right ratio on difficulty for the platform, value provided and number of users reached. So the additional value provided by Amazon (eg.notifications) and the current bigger market share create a potential virtuous cycle to attract more developers that in turn will keep increasing the value of the Alexa platform. The Internationalization Front Interestingly, the fight for the Home OS is still focused in a very limited number of markets: Amazon Echo only available in the US, . United Kingdom and Germany Google Home, has a slightly wider support, with devices available in Australia, Canada, France, Germany, United Kingdom and the US. . HomePod has been announced to just be available in the United Kingdom, US and Australia these year And this is where Amazon may be at a disadvantage, because big internalization efforts are needed for intelligent assistants to speak and understand other languages and accents. And Alexa at the moment only works in English (and not all variants) and German. In this space Google Assistant and Siri are better positioned, as they already cover more languages and geographies, so — without giving up in the US market, which is always the main ambition for these companies — if Apple or Google get their devices into markets where Amazon is not yet present, that could bring them further opportunities. The Life OS But the ambition of these players does not limit to becoming the Operating System in your Home. They want to become the Operating System for your life. That is why Alexa is also , , and !! And there are also . available in smartphones smartwatches even cars rumors of Amazon launching Alexa-powered glasses That is why Google is getting . And and are coming soon. Assistant in the latest Bose headphones appliances cars That is why Apple is expanding Siri from the phone, to the desktop, the home speaker… and . Although Apple has not opened Siri to third party devices yet. your Watch The expected revolution in the human-computer relationship is that intelligent assistants will become the main way to interact with services, content and the physical world. Today this kind of thing is happening sporadically: you ask Google Assistant for directions, you ask Alexa for a song, you turn your lights off with Siri. But the big players think it may become the natural way to do everything in the future, specially as more people get connected , and that is why, while Amazon is currently leading the Home OS battle, there will be a lot more action in the Life OS war.

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How Amazon is winning the battle for the Home Operating System

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How Amazon is winning the battle for the Home Operating System

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