Is Amazon Hardware Another Antitrust Threat?

As we consider the implications of the Department of Justice announcement of the new antitrust case against Apple, we want to keep our eye on the Federal Trade Commission and several States Attorneys General’s antitrust case against Amazon as well. Evidently, there are multiple enforcers of US antitrust law, and there are multiple ways of potentially violating those laws. 

Much of the DoJ case revolves around how Apple may prevent competitors from accessing its hardware and software ecosystem, as demonstrated by low penetration in some critical product categories. The FTC case against Amazon is focused on how its policies may motivate manufacturers and third-party sellers to maintain higher prices than they would in a truly competitive market.

The Apple case makes us wonder if there is a hardware device angle to potential Amazon antitrust cases as well. Last week, we looked at US market share for smart speakers. Now we dig deeper, looking at how successfully the three smart speaker platforms have reached into users’ homes. 

We have long thought the number of devices owned represents a useful measure of how successfully each platform is integrating into its customers’ lives and homes. Amazon seems to agree, and historically has emphasized ownership of multiple Echo devices. It promotes multi-device deals and aggressively prices its smallest, entry-level Dot and now Pop models.

That emphasis has helped its penetration. Amazon has greater success at selling multiple units to a single customer as compared to Google and Apple. 42% of Amazon customers own more than one Echo, compared to 33% for Google and 27% for Apple (Chart 1). We use our semi-annual survey of US smart speaker buyers to compare Amazon Echo to Google Home and Apple HomePod.