Junkification Of Amazon

US e-commerce giant Amazon launched its third-generation, large-format Echo smart speaker on Nov. 4, 2018.

Two years after Amazon first unveiled its smart devices, they have seen tremendous success with the introduction of the Kindle Fire HDX tablet and Echo, voice-activated speakers with built-in microphones, the Tear 2018 technology, and the Echo Show.

Amazon now owns a combined 90% of the U.S. e-commerce market (see Figure 19) — a growth gap that was supposed to be filled by its competitors: not Google, not Samsung, not China.

Amazon had hoped to protect its leadership position among e-tailers by maximizing the Amazon Echo as the new go-to smart speaker. But rather than closing the gap, Amazon appears to have decided to tap into its competitive advantage by inventing a new category.

The good:

Dealing with the big market is complicated

Amazon was very busy with the Amazon Fire phone and Kindle tablets, all being quite cheap and popular. In the United States, there are 13 billion Amazon Prime Air subscriptions, 1.8 billion Kindle Fire tablets, and 510 million Echo devices. The Echo Show is also going strong. All of Amazon’s new technologies are so new, that Amazon can actually only use some of their products in the market.

However, for all of the Amazon Echo’s innovations, none of these could offset the dominance of the Echo Show in the U.S. market. Until recently, Amazon’s selling point was that the Echo Show had hardware that was the same as the Alexa virtual assistant, and Amazon was quite happy to market the new Echo speaker as having made improvements all around it.

According to the Wall Street Journal, Amazon CEO Jeff Bezos said: “We’re not worried about how big the speaker market is. It’s how our customers use the product, not our voice assistant.”

As many amazon shoppers know, this point was not very good for Amazon. Users were encouraged to use the Amazon Web Services console rather than the Alexa virtual assistant. To this end, Amazon released the new Echo speaker, which has a built-in Web Services console for users to update.

However, for all of its devices, Amazon could not replace the Echo Show.