Will a High Volume Strategy Win the Smart Speaker Market? (Premium)

Microsoft's high volume, low-cost strategy was the winner in the PC market. But will it work with smart speakers too?

I think it will. And the goal here for any platform maker---Amazon and Google being the key players, but also Apple, Microsoft, and Samsung---is to get their technology in front of as many consumers as possible. And in doing so, may their digital personal assistants more essential to those customers' day-to-day lives.

So far, only Amazon and Google are making a credible play. And each is doing so via a similar strategy, which involves creating a range of first-party smart speakers at different price points and capabilities. And, as crucially, engaging with third-party hardware makers so that they can provide even broader access to their assistants, in smart speakers and in other products.

On that note, it may be easier to explain what the also-rans are doing. Which is to say, not much.

Samsung was the last major platform maker to enter this market: It introduced its Bixby assistant alongside the Galaxy S8 and S8+ back in March 2017. As I noted at the time, Bixby is unnecessary, given the glut of digital personal assistants. And in a tough start, this technology didn't even ship in the United States until late July 2017.

As originally envisioned, Bixby was a unilateral move on Samsung's part. And it probably expected that its market power as the world's largest maker of smartphones would be enough for it to shoehorn itself into this new field. But that didn't happen: Bixby is loathed by Galaxy users, and they spent much of 2017 trying to disable this technology or use Google Assistant instead. So Samsung switched gears, announcing in October that it would open up Bixby 2.0 to third-party hardware partners too. It's too early yet to know whether this effort will pay off. Spoiler alert: It will not.

Microsoft fans spent much of 2016 fretting about whether the software giant would ever get serious about competing with Amazon Echo and Google Home devices in homes. We were treated to various rumors and leaks of coming smart speakers, but nothing solid. So Brad and I were quite interested to meet with Microsoft’s Ryan Gavin to talk Cortana strategy at CES 2017, about one year ago.

Microsoft had no plans to sell its own Cortana smart speaker or device, we were told: Instead, it would follow its original PC strategy and leave that to third-party hardware makers. Not having to compete with Microsoft was a key selling point for the platform, we were told.

But that lack of competition resulted in exactly one Cortana-based smart speaker in all of 2017, the surprisingly solid (from a hardware perspective) Harman Kardon Invoke. Ironically, the problem with the Invoke is Cortana: Microsoft's digital personal assistant just isn't as sophisticated as Alexa or Google Assistant, so it can't do as much. There are examples of this---Cortana can control individual Philips Hue lights, but it can't handle the roomfuls of l...