Amazon (AMZN - Free Report) is leaving no stone unturned to expand its family of Echo devices. This is evident from its launch of Echo Show 5 which is an upgrade to the Echo Show series.
Notably, the company’s new smart speaker is equipped to let users enjoy Prime videos and shows from NBC on its 5.5-inch display, thus bolstering its entertainment initiatives. Users will be able to watch short news clips from sources like Reuters and CNN, to name a few.
Further, it plays songs through voice command via Alexa from music streaming services like Amazon Music, Spotify, Apple Music and Pandora, to name a few.
Apart from all these, Echo Show 5 is equipped with a built-in camera shutter which is capable of controlling smart devices around the home. Further, it also has two-way talk feature in with Ring doorbell cameras. These features are evidence of Amazon’s efforts toward innovation in smart home management techniques.
Additionally, in the wake of privacy concerns with regard to virtual assistants, the company is updating Alexa to delete voice recording with ease. This is a significant step toward eliminating privacy concerns which has been plaguing the company for quite some time now.
This privacy push will help the company in gaining traction among customers. Further, comparatively lower price of the new speaker compared with prior versions also remains a catalyst.
Smart Speaker Market Holds promise
The latest move of Amazon bodes well for its strong endeavors toward expansion of footprint in the smart speaker market which is riding on growing proliferation of virtual assistants backed by AI technology.
Per a report from Allied Market Research, this market is expected to reach $23.3 billion by 2025 at a CAGR of 23.4% between 2018 and 2025.
Further, a MarketsandMarkets report shows that the market is anticipated to witness a CAGR of 34.4% between 2018 and 2023 and hit $11.8 billion by 2023.
We believe Amazon is well poised to rapidly penetrate into this potential market on the back of its expanding portfolio of smart speakers and robust Alexa.
The vast growth opportunities in the smart speaker market are enticing enough to attract other tech companies like Apple, Alphabet’s (GOOGL - Free Report) Google, Baidu (BIDU - Free Report) and Alibaba (BABA - Free Report) , to name a few.
All these companies are making every effort to bolster their presence in this market on the back of their improving AI and machine learning techniques (ML) skills.
According to a report from Canalys, the global shipment in smart speaker market during the first-quarter 2019 grew 131.4% year over year driven by strong shipment activity in China. This can be attributed to well performing Alibaba and Baidu. Notably, these two companies accounted for 15.5% and 16% of the total shipment, respectively.
Meanwhile, Google contributed 16.8% to the global shipment.
Nevertheless, Amazon rules the roster with 22.1% share in the total smart speaker shipment. The company’s strengthening Alexa skills, strong privacy push and robust Echo devices family are likely to continue aiding market position.
Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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