Published on : Jun 29, 2018
Alphabet Inc. the parent company of Google and it’s various other subsidiaries created in 2015 through corporate restructuring. The company is now planning to give Google Home Mini smart speakers to each and every household, as stated by Morgan Stanley. Currently the speakers are available at $49 each, which will cost about $3.3 bn. According to Brain Nowak an analyst at Morgan Stanley says that the cost is a small price to pay for Alphabet. As per his analyses the company is efficient enough to take that amount- five times over through their operating profits, which it generates from retail search in the course of next five years.
The major concern that worries Nowak is that Google may lose its ground to Amzon.com, especially when it comes to retail search queries. The penetration of amazon smart speakers is way much higher than Google and the purchases made through it are leading the market. According to the projections made by him states that by 2022 approximately 70% of households will have smart speakers. As per theses estimation the presence of Amazon speakers will be 1.3 times more than Google at that point of time.
As per the projection made by Morgan Stanley, Alphabet is expected to bring $44 bn through retail search revenue by 2022 or approx. $16 bn in operating profit. Another technology devised by Amazon is voice-controlled TVs for which Nowak considers that as and when the number of screen oriented options will increase, voice commerce will get accelerated. Apparently, a small portion who use voice assistance may use them for shopping. While considering these assumptions, Google need more devices or speakers to reach in every home. Nowak also said that, having speaker at home won’t encourage people to start shopping with them. It should be considered that do the users what to enhance the voice search experience or are they comfortable shopping through phones.