Amazon and Google were extremely aggressive with their small smart speakers this holiday season, cutting the price on both the Echo Dot and Google Home Mini to just $29 for months. That was down from a $50 price point on both units before Q4.
That move was great for customers, and I’m sure both Google and Amazon sold a ton of units to holiday shoppers, but analysts have one problem with it; both companies probably lost some money selling them so cheaply.
That sounds like common sense, but really, when you have an already cheap speaker being discounted 40% at basically every brick and mortar location, it’s hard to see how either Google or Amazon could’ve pulled any profit from the devices. The bigger speakers probably made up for some of that, but even the Google Home and Echo were discounted to $79 just like the mini versions.
With all of that being said, these devices probably aren’t made to be high-margin items for Google or Amazon. They’re made to get people acclimated to Google Assistant or Alexa, which then opens things up to selling more connected devices, making purchases from online storefronts, or subscribing to music services. Amazon’s no stranger to this game, but it’s slightly newer territory for Google.
Did you pick up any smart speakers over the past few months at their discounted pricing?