Just Expanded Its Smart Home Lead Over Apple and Google

MarketsMotley Fool (NASDAQ: AMZN) has emerged as a somewhat unexpected leader in the smart home market, thanks to Alexa and its growing portfolio of Echo devices. Rivals like Apple (NASDAQ: AAPL) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) subsidiary Google are also making concerted pushes into the smart home, but are still playing catch-up. In addition, Alphabet subsidiary Nest is expanding its smart home lineup, but Nest works across platforms (including Alexa) and isn't competing on the platform front like Apple and Google.

With the introduction of a handful of new Echo products ahead of the holiday shopping season, Amazon just expanded its lead in a big way.

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Something for everyone

Controlling smart home products through a smartphone works well enough, but the key to Amazon's strategy has been making stationary devices that sit in centralized locations and serve as access points to the smart home. And you never have to worry about charging them since they're always plugged in. It was initially a gamble in an era of increasingly mobile devices, but it's paid off.

And now, Amazon wants you to put an Alexa-powered Echo device in every room in your house, or at least as many rooms as you're willing to buy an Echo for. Here's the current Echo lineup (not including Echo Buttons, which aren't intended for smart home uses):

There's something for just about any smart home configuration or room that you could want. Amazon is also being characteristically aggressive on pricing, specifically because it wants you to buy numerous devices to place all around your home. The company even sells bundles of many of these Echo products with volume discounts. This is a powerful strategy, because with enough devices Amazon can ensure that Alexa is truly ubiquitous in your voice-controlled smart home. You don't have to think about where your smartphone is; you just start talking.

How many HomePods would you buy?

Compare this to Apple and Google. Google released Google Home last year, which mostly follows in the footsteps of the original Echo. Google Home has some advantages in terms of Google Assistant and searching for information, but is behind in terms of the smart home. We'll see next week if Google has anything else up its sleeve at its Pixel event.

Apple is where it gets more interesting, though. The Mac maker's new HomePod speaker is due out within a matter of months, assuming the Siri-powered speaker doesn't run into any delays. HomePod is initially being positioned as a premium high-fidelity audio solution in order to justify the $350 price tag. The smart home functions almost seem like an afterthought, with Apple's marketing focusing primarily on audio features with just a passing mention of Apple HomeKit on its site.

Make no mistake: HomePod is absolutely Apple's big play in offering a voice-controlled smart home that's independent from a smartphone. But at $350 per HomePod, are you really going to buy half a dozen of them to place all around your house? Even if you value audiophile quality (which is potentially lost on most mainstream consumers), you probably don't need that in every room, particularly if you're just looking to control your smart home. For $350, you can buy seven Echo Dots (and that's before factoring in the volume discount for three-packs).

Furthermore, if we fast forward a few years, it's just as hard to imagine that Apple will create a growing family of low-cost (or even midrange) devices whose primary purpose is to bring Siri to every room. It's not impossible, just not likely because the smart home doesn't appear to be a priority for Apple compared to the iPhone or services business.

Generally, Apple doesn't care much about being first to market, as long as it can be the best once it gets there. But if Apple waits too long, while Echo devices proliferate throughout smart homes in the meantime, HomeKit might not have much of a chance to catch up.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Apple. The Motley Fool has a disclosure policy.