Amazon and Google Probably Lost Money on Smart Speaker Sales Last Christmas

By Tom Pritchard on at

Buying an Echo or Google Home at the tail-end of last year was like buying a sofa from DFS. If you didn't get the sale price, you were basically being screwed over. The amount of discounts the devices got in the run up to Black Friday and Christmas was ridiculous, and it makes you wonder how they could make a profit. Well it turns out that they might not have done.

According to a new report, Amazon and Google's obsessive discounting probably lost them money - particularly on their smallest gadgets the Echo Dot and Home Mini. Here in the UK the price was regularly reduced to around £25, down from £50, but over in the US the Echo Dot got as low as $29 (pre-tax).

It seems a bit daft to deliberately lose money to try and shift gadgets, but it seems the two were effectively warring over market share. It's also worth pointing out that other companies have been working tirelessly to produce smart speakers of their own, with Apple's premium-priced HomePod arriving fairly soon. While losing a few quid on a smart speaker might not look like good sense, at least those devices are built into Amazon and Google's respective online ecosystems. Competing products are not, and mean users would drift towards other services.

And by selling cheap small smart speakers to users as an impulse buy, it means any future upgrades will likely be newer versions of the same device. If you;re used to using Alexa, it's easier to stick with Alexa than learn how to use Siri or Google Assistant.

Amazon claims that it had sold "millions" of Echo Dots over the 'holiday season', no doubt helped by the massive discounts, which made it the best-selling product during that time period. According to Reuters Google wouldn't divulge any Home Mini sales figures, but a spokesperson said that the company was happy with the device's sales since it was released last year. [Reuters via Ubergizmo]

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