A recent announcement said that the Amazon Echo has over 1,000 “skills,” which are integrations with different apps to perform different tasks like turning off smart lights or ordering an Uber.
Last week Jeff Bezos called the Amazon Echo connected speaker and smart home hub Amazon’s ‘fourth pillar product,’ joining the e-commerce giant’s retail marketplace, Amazon Prime.
In addition, in her much-anticipated annual Internet Trends report, Mary Meeker, who is sometimes called the “Queen of the Internet,” said that the Amazon Echo voice-powered home assistant is only just starting to take off — and it could be big, with customer adoption growing fast. Echo is up from around 200,000 units sold in the second quarter of 2015 to over a million units sold in the first quarter of 2016.
So how successful is the Echo?
BI Intelligence estimates the Echo has an installed base of 1.6 million — this is the number of people who have bought the Echo. This estimate is much lower than Consumer Intelligence Research Partners’ (CIRP) estimates, which peg the installed base at 3 million. However, the lower estimate is closely tied to Alexa app downloads, which is a crucial component for the Echo purchaser to download in order to set up the Amazon Echo.
The Alexa App has been downloaded 1.9 million times since it was released in 2014, according to Priori data. BI Intelligence estimates 1.15 app downloads for every Echo installed because in some households will have multiple smartphone users for a single Echo.
Further, consumers can uninstall and re-download the app, so there can be double counting of an Echo for an app download. In addition, there could be more than one Echo per household and instances when users set up their Echo using a compatible web browser, which makes up a small portion of the overall user base.
For certain, the smart home market has yet to truly take off. At its current state, it is stuck in the ‘chasm’ of the technology adoption curve, in which it is struggling to surpass the early-adopter phase and move to the mass-market phase of adoption. Among the barriers preventing mass-market smart home adoption are high device prices, limited consumer demand and long device replacement cycles. However, the largest barrier is the technological fragmentation of the smart home ecosystem, in which consumers need multiple networking devices, apps and more to build and run their smart home.