Smart home speakers like the Amazon Echo and the Google Home have been thus far positioned as novelty personal assistants, but this could soon change. The Wall Street Journal reports that both Amazon and Google are looking to integrate a voice-calling feature to the speakers, adding valuable functionality for users and giving the tech giants more insight into users’ home lives.
If the companies manage to launch the feature, it would impact not just the smart home experience, but the mobile one as well.
The companies’ strategies for integrating such a feature remain unclear, but it’s likely that users’ existing mobile devices will need to be linked to their smart home speakers. There are two possible strategies on the table for bringing mobile connectivity to smartphones — one involves giving each device a unique phone number, and the other involves connecting the smart home device to a user’s existing mobile device. The latter strategy is more likely because it would open access to users’ existing contacts, call records, and favorites.
There are a couple of implications of integrating voice calling to smart home speakers:
- It would move smart home speakers into the essential fabric of the home. Echo products and the Google Home are currently marketed as home personal assistants, offering features like hands-free control of smart home devices and the ability to look up quick facts. But calling is a capability that’s essential to the vast majority of Americans. If devices with Alexa embedded in them gain this capability, consumers would be less likely to view these devices as merely a luxury.
- It could also increase the length of the smartphone upgrade cycle, which might, in turn, impact shipments. If consumers gain another avenue through which to make calls and send text messages, they may be less inclined to use their traditional mobile devices as frequently. A Pew survey from last year found that calls, texts, and emails comprise the vast majority of activities users perform on their mobile phones. Less usage of mobile could lead to consumers feeling less of a need to replace their smartphone as often as they currently do, subsequently impacting shipments of these devices.
But here are some issues that both companies and their customers could run into given the introduction of such a feature:
- Collaboration with phone companies if they want to give every device a unique phone number. If Google and Amazon want to give each individual device a unique phone number, they would likely need to work with telcos to establish plans. While Google’s history of working with Verizon for devices like the Pixel phone could give it a leg up on Amazon, which hasn’t worked in the mobile space extensively since the Fire phone was discontinued, both companies would need new agreements and partnerships to make this feature a reality.
- Constant speakerphone setting. To enable a calling capability, the smart home speakers would always have to be in speakerphone mode, which could be inconvenient for users. Further, users wouldn’t be able to have a private phone conversation as they would with a handheld device.
- Issues with law enforcement. Law enforcement officials maintain the authority to monitor and collect phone conversations as long as they present an approved warrant. But, with these devices, it’s unclear whether, legally speaking, a user is making phone call or simply speaking to their voice assistant. Further, Amazon and Google may need to change the nature of how they collect conversations on these devices, as they might be violating state laws if these conversations are deemed to be phone calls.
- Potential privacy concerns from consumers. The Echo products and the Google Home are always on — they’re listening to users’ conversations and other noise within range, even when Alexa or the Google Assistant aren’t activated. Consumers might be hesitant to use a feature that could potentially allow these companies to monitor their phone conversations.
The U.S. smart home market has yet to truly take off. At its current state, we believe the smart home market is stuck in the ‘chasm’ of the technology adoption curve, in which it is struggling to surpass the early-adopter phase and move to the mass-market phase of adoption.
There are many barriers preventing mass-market smart home adoption: high device prices, limited consumer demand and long device replacement cycles. However, the largest barrier is the technological fragmentation of the smart home ecosystem, in which consumers need multiple networking devices, apps and more to build and run their smart home.
John Greenough, senior research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on the U.S. smart home market that analyzes current consumer demand for the smart home and barriers to widespread adoption. It also analyzes and determines areas of growth and ways to overcome barriers.
Here are some key takeaways from the report:
- Smart home devices are becoming more prevalent throughout the US. We define a smart home device as any stand-alone object found in the home that is connected to the internet, can be either monitored or controlled from a remote location, and has a noncomputing primary function. Multiple smart home devices within a single home form the basis of a smart home ecosystem.
- Currently, the US smart home market as a whole is in the “chasm” of the tech adoption curve. The chasm is the crucial stage between the early-adopter phase and the mass-market phase, in which manufacturers need to prove a need for their devices.
- High prices, coupled with limited consumer demand and long device replacement cycles, are three of the four top barriers preventing the smart home market from moving from the early-adopter stage to the mass-market stage. For example, mass-market consumers will likely wait until their device is broken to replace it. Then they will compare a nonconnected and connected product to see if the benefits make up for the price differential.
- The largest barrier is technological fragmentation within the connected home ecosystem. Currently, there are many networks, standards, and devices being used to connect the smart home, creating interoperability problems and making it confusing for the consumer to set up and control multiple devices. Until interoperability is solved, consumers will have difficulty choosing smart home devices and systems.
- “Closed ecosystems” are the short-term solution to technological fragmentation. Closed ecosystems are composed of devices that are compatible with each other and which can be controlled through a single point.
In full, the report:
- Analyzes the demand of US consumers, based off of survey results
- Forecasts out smart home device growth until 2020
- Determines the current leaders in the market
- Explains how the connected home ecosystem works
- Examines how Apple and Google will play a major role in the development of the smart home
- Some of the companies mentioned in this report include Apple, Google, Nest, August, ADT, Comcast, AT&T, Time Warner Cable, Lowe’s, and Honeywell.
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