Smart Home Users Haven’t Embraced Voice Control

We’ve spent some time lately exploring how Amazon could make money from Amazon Echo devices. Earlier, the Wall Street Journal reported Amazon loses money on the Echo hardware business. We took off from there to look at other sources of revenue, or “downstream impact”, as Amazon would say. These other sources include using Echo as a way to shop at Amazon.com and Echo motivating other smart home device purchases. We conclude this exploration by looking at how smart home accessories might drive subscriptions and even AI applications of Alexa, the interactive software that powers Echo devices.

Echo owners routinely use voice commands to set alarms and timers, request streaming music, and ask questions. Yet for smart home devices, such as thermostats or doorbells, they seem to prefer other means of managing and controlling them. This may make it difficult for Amazon to generate ongoing subscription or premium service revenue from the Alexa platform on Echo devices.

In our surveys of smart speaker owners, we ask those that own various smart home accessories how they control them: using a smartphone, tablet, or computer app; on the device itself; or through Alexa on their Echo smart speakers. Most owners control these accessories using an app. Drawing from data from our semi-annual survey of smart speaker buyers, we looked at four accessories that offer all three alternatives: thermostats, security cameras, door locks, and doorbells.

At least two-thirds of Echo owners prefer to use a device’s dedicated app to control it, with as much as 86% for security cameras (Chart 1).