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Instant Analysis: Announces New Alexa Devices

By Evan Niu, CFA – Mar 3, 2016 at 12:45PM

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Amazon now has an entire family of Alexa-enabled devices that start as low as $90.

Amazon Tap. Image source: Amazon.

What happened?
E-commerce heavyweight (AMZN 4.46%) has unveiled two new devices that support its Alexa virtual assistant. Alexa is now a family of devices beyond just the Echo. The two new devices are Echo Dot and Amazon Tap.

Echo Dot is a small voice-activated device that connects to third-party speakers through an audio cable or Bluetooth. There is a small built-in speaker for stand-alone usage. Echo Dot is priced at $90. Amazon Tap is a smaller speaker that connects using Bluetooth or Wi-Fi, similar to the original Echo. Amazon Tap is available for $130.

Does it matter?
While Amazon was late to the virtual assistant party relative to some of its large-cap tech peers, it has been aggressive with a wide range of strategies intended to promote adoption. Amazon quickly opened up Alexa's APIs to third-party developers, and you can now order a pizza or an Uber through Alexa, for example.

Growing the installed base is also an important piece of that puzzle, and introducing a wider range of Alexa-enable devices at different price points will help in that department. The $90 Echo Dot is now the most affordable way to use Alexa, and users can be confident that Amazon will continue to bolster Alexa's software capabilities once they purchase the hardware. Naturally, Alexa would be happy to help you order more stuff on Amazon as well.

Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool owns shares of and recommends We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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