Echo Steps Up Game To Fend Off Rivals

Industries Dow Jones Newswires

Amazon.com is due to unveil a new Echo speaker with a screen that will incorporate video calling capabilities, according to people familiar with the matter, keeping the online retailer one step ahead of tech rivals in seeking to control smart homes. 

Continue Reading Below

The new device, which is expected to be announced as early as Tuesday, will also allow users to make internet-based telephone calls, according to these people, setting the speaker up to be core to a home's communications. 

Equipped with a 7-inch touch screen, the device will be able to visually summon answers to verbal questions, providing information like e-commerce search results in a more digestible fashion. The new Echo, which has been in beta testing with employees for a few months, could start shipping to consumers as early as next month. 

An Amazon spokeswoman declined to comment. 

The new device is expected to be priced at more than $200. The current Echo speaker, which doesn't have a screen, usually sells for $180, although it is currently on sale for $150. Late last month, Amazon introduced a separate Echo device equipped with a camera but no screen, the Look, which is priced at $200. The Echo Look is so far only available to consumers via invitation. 

Amazon is in a broader race with a number of tech giants to create and install speakers using digital assistants to eventually run homes, cars and offices. Alphabet's Google Home is the biggest competitor so far to Amazon and its Alexa digital assistant. Microsoft on Monday introduced its new voice-controlled speaker, Invoke, made by Samsung Electronics, that can make phone calls. Consumers are able to use devices like the Echo and Google Home to turn off lights, close the garage door, lower the temperature and -- in Amazon's case -- order online. But none have expanded their speaker devices to include screens yet. 

Continue Reading Below

The Wall Street Journal first reported last year that Amazon's Lab126 hardware unit was working on an Alexa-powered device featuring a tabletlike computer screen, allowing users to summon webpages, videos or images. 

Separately, the Seattle-based retailer is expected to announce a broader rollout of telephone services for Echo devices within the next few weeks, according to the people, a feature The Wall Street Journal reported on in February. 

Calling capabilities may be rolled out in stages, one of the people said, for example starting as an intercom within the house between Echo devices, or between Echo owners. Because the capabilities are internet based, it isn't expected to require a SIM card or other mobile phone technology. 

Bloomberg earlier reported that Amazon was working on a new device that was likely to have a 7-inch touch screen, while CNET reported an announcement of a new Echo was likely to take place this month. 

Amazon's Echo is off to an early lead, analysts say, thanks in part to its release in 2014. (Google Home was introduced late last year.) The Echo dominates the market for voice-enabled speakers with a 70.6% share, digital marketing research firm eMarketer said Monday. Google Home has the second-highest market share at 23.8%. 

"Consumers are becoming increasingly comfortable with the technology, which is driving engagement," said Martín Utreras, vice president of forecasting for the firm. 

Amazon has also added thousands of applications, from being able to hail an Uber to order a Domino's Pizza. Until now, developers have generally limited its artificial intelligence-powered assistant Alexa's response to a couple options to keep from overwhelming users. 

Amazon's move to introduce its screened Echo device may also be an effort to head off new competition with Microsoft's Invoke launch. The personal video call field has long been dominated by Microsoft's Skype and Apple's FaceTime, among other services. Earlier this year, Amazon announced its new Chime videoconferencing service, marking its entry into the market. 

The new Echo screen device will likely support some of the same functionality as the Echo Look, which will enable consumers to take videos and photos of their outfits and compare them via algorithms, according to one of the people. It is unclear why Amazon is launching the two devices so close together or how the market segments they target may differ. 

Ryan Knutson contributed to this article. 

Write to Laura Stevens at laura.stevens@wsj.com