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A Foolish Take: Amazon Will Rule the US Smart Speaker Market in 2019

By Leo Sun - Dec 24, 2018 at 12:00PM

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But Google is still gaining ground.

Amazon ( AMZN -1.38% ) created a new market when it launched the first Echo smart speaker in 2014. That first-mover advantage, its tight integration into Amazon's e-commerce and cloud ecosystems, and aggressive promotions made it the top smart speaker brand in America in 2018.

A recent eMarketer report estimates that Amazon will maintain that lead by a wide margin next year, but other rivals -- most notably Alphabet's ( GOOG -0.87% ) ( GOOGL -0.68% ) Google -- could gain ground at its expense.

US smart speaker market shares.

Data source: eMarketer. Chart by author.

Google is leveraging its market-leading position in online search to sell its Home speakers. Like Amazon, Google sells different versions of its speaker across a wide range of price tiers. The cheapest version costs $50, while the Home Hub -- which competes against Amazon's pricier Echo Show -- costs $150. Amazon and Google are also both integrating the speakers' Alexa and Assistant platforms, respectively, into third-party devices.

Amazon and Google's duopoly in the U.S. smart speaker market could make it tough for other challengers -- like Apple's much pricier HomePod and Facebook's poorly timed Portal -- to gain traction. It also indicates that Amazon's and Google's speakers could dominate the budding smart home market as central control hubs.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$2,840.03 (-0.68%) $-19.29
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$3,389.79 (-1.38%) $-47.57
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$2,850.41 (-0.87%) $-25.12

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