New Voice Control Devices from Apple and Amazon Support New Directions in Smart Home

New voice control front-end devices from Apple and Amazon, released in time for the crucial fourth quarter, highlight the continued importance of these devices to smart home proliferation. While the new releases will intensify competition in the market, the addition of new key hardware in their latest offerings (UWB for Apple and dedicated edge analytics for Amazon) also signals change and emerging strategies for the wider smart home market.

In November, Apple launched the HomePod mini voice control front-end. The new US$99 mini speaker device, though still priced at a premium, will compete more directly with market leaders Amazon and Google, both of which have had their similarly sized respective offerings (the Amazon Echo Dot and Google Home Mini) in the market for several years. Low pricing has been a key driver for voice control acceptance in the smart home and Apple’s HomePod (US$349 at launch in 2018) offering has long failed to ignite mass adoption. As a result, Apple has had a single digit voice control market share, which, given the company’s huge smartphone, computer, and streaming service reach, highlights how massive the company’s missed opportunity has been. The new HomePod mini device will bring Apple into the mainstream market for home voice control and help it appeal to a far wider audience for its smart home HomeKit platform. For an Apple userbase looking for a single interface between other Apple devices and home control, the new mini device is significant. In addition, Apple’s more focused approach to user data monetization may also win converts that its high-end price point offering failed to entice.

For its part, Amazon announced a new range of Echo devices (4th generation) including a new Echo Dot, a new Echo, and a new smart display—the Echo Show 10 in September with shipping starting in the fourth quarter. The company’s lowest priced device is priced at half that of Apple’s new offering, with the Echo Dot priced at US$49.99, but the larger Echo priced at US$99.99. The company also released the new Echo Show 10 smart display priced at US$249.99. With the breadth of range of Amazon’s offerings, wider ecosystem support for third-party integrations, and new subscription services such as its new Alexa Guard Plus emergency helpline service, the company continues to break new ground in expanding what value it can get and provide to its smart home userbase.

The pricing of the new devices from both vendors emphasizes that the market - while maturing in functionality and adoption – remains keenly focused on building as broad an install base as possible. But even more so, it is the technology bundled into the new devices that indicates how these devices will continue to drive new smart home services to enable the emerging transformational smart home. By embedding UWB in its new mass market offering, Apple is deploying the infrastructure for smart home systems that can be increasingly sensitive to the homes they operate in. UWB delivers the potential to pinpoint the location of supporting devices within the home environment. With that infrastructure around the smart home, Apple will have the detailed understanding of the home environment to support a range of smart home devices and services. The expected delivery of Apple UWB tags (to compete with smart tags such as those from Tile) comes just as Apple has a truly competitive entry point for end users to use its smart home voice control. With UWB already embedded in the latest generation of Apple iPhones, iPads, Apple TV devices, and even Apple Watches, Apple has the ability to not only locate devices around the home but to begin to personalize the home environment, understanding the preferences of those individuals wearing or carrying those devices. Personalization is a key end goal for smart home providers and Apple’s use of UWB is a key step forward in that capability. ABI Research will detail the UWB opportunity in the upcoming ABI Research market data Smart Home.

As Apple brings UWB to the smart home space, Amazon for its part is also leading the market in a new direction. The company has embedded its own AZ1 AI chip in its latest Echo generation. The AZ1 support means voice control and additional functionality delivered from the device rather than via the cloud. It is embedded just as Amazon has positioned its new Echo devices as smart home controllers capable of communicating directly and not via cloud integration to devices around a home using Zigbee, Bluetooth LE, and Amazon Sidewalk as well as Wi-Fi. Combining controller functionality with edge analytics should deliver greater smart home functionality, even if broadband connectivity is lost.

Although edge analytics has been pushing into HD and high-end smart home video cameras for some time, Amazon’s investment in its new edge chip design and its inclusion across the new generation of Echo devices highlights the value and potential for edge analytics to push into a wider range of devices, even those not handling bandwidth-heavy applications such as video. ABI Research believes there is significant potential for other smart home OEMs and service providers to include dedicated edge analytics silicon in their devices and will publish an in-depth report on the topic this month. Amazon’s innovative history in the development of the smart home voice control market will help drive competitors to bring edge analytics to their devices, especially as competition for the smart home controller transitions into multi-function devices and primarily the home router or the voice control front-end.

The fourth quarter is key for voice control smart home shipments. In this year of global pandemic, spending on these devices will continue to be strong for a list of reasons, including the discounting that will come to these devices again this year. Consumers are spending more time in their homes, are increasingly understanding the value of touchless control in the home, and are shopping online more than ever. This will help drive voice control shipments to new heights, but the additional functionality launched by Apple and Amazon will also ensure that those purchases will continue to support new functionality and new revenue streams for the smart home industry for years to come.