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Will Amazon (AMZN) Launch a New Version of Echo this Week?

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Amazon.com Inc. (AMZN - Free Report) has gained a leading position in the growing personal assistant market. Creation of products meant to control home devices like home security, lighting and sprinklers, to name a few, is making Amazon a household name.

Per the Wall Street Journal, the company is planning to launch a new version of Amazon Echo this week. Reportedly, the new touchscreen Echo will be the fifth generation Echo device from Amazon.

Though not much detail is available, the new version is expected to feature a seven-inch display touch screen with a camera on top and a speaker underneath. The device will allow users to make video calls, giving it an edge over its competitors. It is expected to be priced at $200.

Following the news, Amazon’s share price was up 1.59% to $949.04. Also, over the last six months, shares of Amazon have been steadily treading higher. The stock returned 27.6% compared with the Zacks Electronic Commerce industry’s gain of 25.9%.

Echo Gaining Popularity

As per a recent report from eMarketer, Echo is the most popular voice-controlled speaker so far and is expected to maintain its supremacy in 2017.

Per the report, the number of Americans using home assistants is projected to more than double this year. The report stated that Amazon will have more than 70% of all voice-enabled speaker users in the U.S. this year. On the contrary, Google Home is expected to account for 23.8%, well below Amazon. However, other smaller players like Lenovo, LG, Harmon Kardon, and Mattel accounts for only 5.6% of the total users.

The above numbers says everything about Amazon’s Echo-branded speakers. The company’s interest in expanding the Echo family definitely makes sense. The first three are speaker-only models namely, the original Echo, the smaller Echo Dot and the portable Tap.

Last month, Amazon announced the fourth of its type - Echo Look - an invite-only device with a built-in camera that gives the user fashion tips. Reportedly, the touch-screen Echo is also expected to carry these features.

These features should further increase the number of people shopping on Amazon.

About Echo

Echo is a little speaker-like home automation device that can do everything from streaming music to dimming lights or cranking up the heat on the compatible thermostat. The Echo operating system is named Alexa and the built-in voice recognition system can hear users from across the room, and is plugged in at all times.

Bottom Line

Amazon can be called a technology giant poised to rule the technology world in the years to come. The company has converted the nascent smart home market into a potential area of growth, in a very short time, backed by its Alexa-powered echo devices.

However, the company hasn’t always had the best success with its branded electronics line. Yet demand for Amazon’s home devices has been rising as it is one of the few companies offering something that is both affordable and replete with features.

Amazon.com, Inc. Price and Consensus

 

Amazon.com, Inc. Price and Consensus | Amazon.com, Inc. Quote

Zacks Rank and Stocks to Consider

Currently, Amazon has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry are Lam Research (LRCX - Free Report) and KLA-Tencor (KLAC - Free Report) , each carrying a Zacks Rank #1 (Strong Buy), while Applied Materials (AMAT - Free Report) , carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Lam Research delivered a positive earnings surprise of 6.14%, on average, in the trailing four quarters.

KLA-Tencor delivered a positive earnings surprise of 11.55%, on average, in the last four quarters.

Applied Materials delivered a positive earnings surprise of 3.92%, on average, in the trailing four quarters.

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