On Thursday, Morgan Stanley analyst Brian Novak suggested a simple but brilliant idea for Google (Alphabet) to do one thing that actually could upset Amazon.
“We argue Alphabet needs more devices/smart speakers in people’s homes. The growth of voice shopping combined with Amazon’s expected install base advantage could threaten long term growth in Alphabet’s high-monetizing retail search category. Like the mobile transition when Alphabet gave Android to OEMs and began paying Apple to power Safari search, we believe Alphabet should give away a Google Home Mini to every U.S. (arguably global) household.”
Normally, it is Amazon that announces an acquisition or new feature that interrupts a shopping category, but in this case, Google would be disrupting Amazon for once.
Obviously, Amazon could easily counter to give away an Echo Dot for free, but the publicity such a move would create by Google, would put the Seattle-based retailer behind the curve a bit.
Nowak said he estimates Amazon will have 62 percent market share of the U.S. smart speaker segment by the end of 2018, versus 33 percent for Google.
He further stated that he projects more than 70 percent of U.S. households will own a smart speaker with voice commerce capabilities by 2022.
The Cost is Only $3.3 Billion
The Morgan Stanley analyst believes the price tag for giving every home in America one Google Mini is about $3.3 billion, which for a company like Google (Alphabet) is nothing.
But if Google were to seriously consider his idea, it could also lean on Walmart and eBay to help with such a promotion.
Since both companies are already on Google Home, and would likely never be on Amazon’s Echo line, they both would be two of the biggest benefactors of this idea.
Google could work with Walmart and eBay to promote the free speakers on their sites. And both companies could even receive brand specific packaging and include specialized promotions in the box to help rapid eCommerce adoption of Google Home.
If successful, and does anyone doubt this wouldn’t be, Google could expand the promotion globally with interested eCommerce partners.
Sound like a totally crazy idea?
Just remember that the iPhone came out first and it wasn’t until Google decided to give away Android to device makers that it started to dominate the smartphone space. Today, over 85 percent of smartphones are powered by Android.
Not so crazy now, is it?
What do you think about this idea from the Morgan Stanley analyst? Let us know in the comments section down below or over on our Facebook Group.
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