Amazon (NASDAQ: AMZN) created a new market when it launched the first Echo smart speaker in 2014. That first-mover advantage, its tight integration into Amazon's e-commerce and cloud ecosystems, and aggressive promotions made it the top smart speaker brand in America in 2018.
A recent eMarketer report estimates that Amazon will maintain that lead by a wide margin next year, but other rivals -- most notably Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google -- could gain ground at its expense.
Google is leveraging its market-leading position in online search to sell its Home speakers. Like Amazon, Google sells different versions of its speaker across a wide range of price tiers. The cheapest version costs $50, while the Home Hub -- which competes against Amazon's pricier Echo Show -- costs $150. Amazon and Google are also both integrating the speakers' Alexa and Assistant platforms, respectively, into third-party devices.
Amazon and Google's duopoly in the U.S. smart speaker market could make it tough for other challengers -- like Apple's much pricier HomePod and Facebook's poorly timed Portal -- to gain traction. It also indicates that Amazon's and Google's speakers could dominate the budding smart home market as central control hubs.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Leo Sun owns shares of Amazon, AAPL, and FB. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, AAPL, and FB. The Motley Fool has the following options: long January 2020 $150 calls on AAPL and short January 2020 $155 calls on AAPL. The Motley Fool has a disclosure policy.