Amazon Echo turns into a sleeper hit, offsetting Fire’s failure

March 29 02:06 2016

The Amazon Echo is turning out to be a sleeper hit. The stand-alone, voice-activated digital assistant is on back order,  it was cited when premium speaker maker Sonos announced layoffs and it appears to be prompting other device makers (think Google’s Nest) to work on their own look-alike services. This is a nice come-uppance for Amazon, which saw its entry into smart phones crash and burn with Kindle Fire.Jeff Bezos

Far from being simply a popular new tech toy, analysts see the Echo and its digital assistant persona Alexa as a game-changer. The question for many is whether Amazon will end up owning this vital market by the time it matures. While Amazon and others tout the Echo’s abilities in the connected home realm, the lure for many seems to be an easy-to-use way to play music, including everything in Amazon Prime’s music catalog. “If you’re buying an Echo, that becomes your in-home speaker,” said Rob Enderle of the Enderle Group in Bend, Ore..

He’s getting deja vu from 2001, when the iPod was first released. The pocket-sized digital music player helped usher in a new and almost unrecognizable computer scene where everyone carries a computer (i.e. a smartphone) in their pocket, driving up Apple sales, profits and share price. Apple is now the world’s most valuable tech company. “When Apple came out with the iPod, suddenly all the FM radios and the CD players went away. All the iPod did was play music. But eventually it led Apple to the iPhone and then it kicked all the phones off the market. It was amazingly viral,” he said. It’s already starting to happen with the Echo.

Sonos, the maker of the popular WiFi speakers, surprised many in the tech industry when it laid off employees earlier this year and at the same time said it would shift focus to paid streaming and voice-activated speakers, noting big advances in voice recognition from Alexa and apps like Siri, Cortana and Google Now. “Alexa/Echo is the first product to really showcase the power of voice control in the home. Its popularity with consumers will accelerate innovation across the entire industry,” said Sonos CEO John MacFarlane in a blog post announcing the changes. “Voice is a big change for us, so we’ll invest what’s required to bring it to market in a wonderful way.” Sonos spokeswoman Errin Cecil-Smith said the success of Echo and layoffs at Sonos “are not directly correlated.” She declined to provide further comment on the layoffs.