Amazon is deeply discounting its two most popular Alexa devices today, the Echo and Echo Dot, as the retailer’s annual Prime Day sale kicks off. Starting tonight at 6 PM PT, the Echo will receive a 50 percent price cut, making it $89.99, and the Echo Dot will drop by $15, bringing it down to $34.99. Meanwhile, Amazon’s bluetooth speaker with Alexa, the Amazon Tap, is $50 off, making it $79.90.
The sale on the Echo Dot is notable, given that a recent e-commerce study from Adobe identified the Alexa-powered smart speaker as the best seller among Amazon’s Echo line. Their report indicated the Dot’s lower price point attracted consumers, who perhaps saw the device as an affordable way to dip their toe into the waters of voice computing, without committing to the pricier Echo. Now, for Prime Day, the Dot is priced the lowest it has ever been.
Google Home devices had sold well during the 2016 holidays, thanks to a late year-end release, the report also said, but the Echo Dot then quickly caught up and surpassed it.
By the first quarter of the year, the Dot led smart speaker sales, accounting for 53 percent of the market compared with Google Home’s 30 percent share. (Adobe had only counted non-proprietary sales – meaning those outside of Amazon and Google’s first-party storefronts. That gives us a window into device popularity, but not the full picture, we should note.)
However, even at a 30 percent share, that put the Google Home ahead of other Echo devices including the original Echo and Amazon Tap.
With Prime Day, Amazon’s decision to bring down the Echo Dot to its lowest price ever could help it solidify its lead in the market, giving the retailer further momentum. And by discounting the Echo by 50 percent, Amazon could clear out older inventory – perhaps in advance of a hardware refresh.
That would be a timely move on Amazon’s part, given that Apple’s entry into voice-powered speakers, the HomePod, is expected to arrive at the end of this year. As Apple’s device is aimed more at music lovers than those who want a smart speaker, Amazon could counter with an upgraded, better-sounding Echo in response.
Amazon, however, already has the lead in smart speakers – other studies said that Amazon is expected to control 70 percent of the market this year. Boosting sales of Echo devices during Prime Day will only help it to further dominate; it’s not lagging behind anyone.
Also of interest, the retailer appeared to have been closely considering how to best price its Alexa devices in advance of the Prime Day sale. Though Amazon knew as soon as last year’s Prime Day wrapped that it would host another this summer, the decision on Echo device discounts was running so close to the wire that it wasn’t even included in Amazon’s official announcement of deals. That typically implies pricing was in flux down to the last minute.
Other Amazon devices on sale for Prime Day include its Bluetooth speaker Amazon Tap, Dash buttons, Kindle, Kindle Paperwhite, Kindle Voyage, Kindle Oasis, the Kindle for Kids bundle, the new Amazon Element 4K Ultra HD Smart LED TV (powered by Fire TV), Fire 7 tablet and Kids Edition, and Fire HD 8 tablet and Kids Edition. (The full list is here).
We should also point out that Amazon isn’t discounting either of its two newest Echo devices, the Echo Look or Echo Show. The only deal associated with either of those is a $75 savings on a bundle that combines the Show with the Arlo Security Camera. But it’s likely that Amazon doesn’t yet have the inventory to fulfill the expected Prime Day boost in orders for these new Alexa devices.
Plus, Amazon doesn’t really need to bring those prices down at this time to gain market share in their respective niches – a smart speaker with a camera, and another with a screen. There is no real competition for either device from other major tech companies at this time, as both Google and Apple are playing catch up in the market Amazon helped create.
Ahead of Prime Day, analysts have been predicting that this year’s event could be Amazon’s largest ever. The retailer saw a 5 percent increase in consumers who shopped on Prime Day in 2016, which was up 20 percent from 2015, according to Kantar Retail. This year, Amazon is expected to set another record, it says.