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Amazon Partners With Marriott, Expands Echo to Hotel Rooms

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Amazon.com Inc. (AMZN - Free Report) recently partnered with Marriott International Inc. (MAR) to expand the presence of Amazon’s Echo in the latter’s hotel rooms by coming summer.

This is a win-win deal that will give Amazon an edge over competitors and help maintain its supremacy in the voice-controlled speakers market.

Coming to price performance, Amazon has outperformed the industry it belongs to on a 12-month basis. The company’s shares have gained 72.16% compared with the industry’s growth of 39.67%.

Echo Now in Marriott Hotel Rooms

The Marriott hotel chain plans to install Echo in its selected properties this summer, allowing visitors to control environmental conditions with vocal commands.

Alexa technology will let guests control room lights, temperature and service, among other amenities, using voice commands.

The deal will further expand Amazon’s reach in the hotel fraternity. Not only this, the partnership will allow Amazon to keep its customers hooked within its ecosystem of products and services. Also, as Alexa uploads a bunch of personal information on Amazon’s cloud both through the app and while the user is interacting with the device, the company can collect behavioral data. This data is then used to target specific products on Amazon that might be more interesting to customers. This approach will thereby bring in more new customers.

Alexa Continues to Gather Steam

Amazon, with several iterations of the Amazon Echo, has been maintaining its dominant position in the smart speakers market for quite some time now. The global market for voice assistants is expected to grow at CAGR of 39.27% between 2017 and 2023, thereby reaching $7.8 billion by 2023.

Amazon led the market with 43.6% of all smart speakers shipped during the first quarter. On the other hand, Google, with the introduction of Google Home Mini, accounted for 26.5% of the market share in the quarter. Apple’s HomePod, which was launched early this year, gained traction by acquiring 6% market share. Also, Alibaba was successful in acquiring 7.6% share.

There is no doubt that Amazon enjoys a first-mover advantage in this market. The increased adoption of Alexa and Echo devices has helped the company gain significant prominence within a short span of time. The announcement of the partnership further confirms that Alexa could play an even bigger role in customers’ lives.

Nevertheless, competition is on the rise for Amazon. In the area of voice assistants, Google’s Assistant and Apple’s Siri provide tough competition to Amazon’s Alexa. The global market for voice assistants is expected to witness a at CAGR of 39.27% between 2017 and 2023, and reach $7.8 billion by 2023.

Bottom Line

Amazon Alexa-powered Echo devices have been one of its best-performing products so far. These devices support Amazon’s bottom line even after sale by complementing Amazon’s other services. Expanding in new hotel rooms, vacation rentals and other hospitality settings will help in increasing its user base. Consequently, its recurring revenue base will also improve.

Moreover, we believe that the deal will not only help Amazon sell products in the hospitality space but also aid in getting a lot of user data that it can utilize to provide more customer-oriented services. This will bode well for the company’s top line in the long haul.

Amazon.com, Inc. Price and Consensus

 

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

Zacks Rank & Other Stocks to Consider

Currently, Amazon sports a Zacks Rank#1 (Strong Buy). Other top-ranked stocks in the same industry include Groupon (GRPN - Free Report) , PetMed Express (PETS - Free Report) and Expedia (EXPE - Free Report) . While Groupon sports a Zacks Rank #1, PetMed and Expedia both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Groupon, PetMed and Expedia is currently projected to be 6.5%, 10% and 14.5%, respectively.

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