Strategy Amazon sees huge spike in Echo sales on Prime Day (AMZN)

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Sales of Amazon’s Echo line of smart speakers jumped during the e-commerce giant’s “Prime Day” sales event, the company announced

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(BI Intelligence)
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Sales of Amazon’s Echo line of smart speakers jumped during the e-commerce giant’s “Prime Day” sales event, the company announced.

Its Echo Dot — which saw a 30% price cut to $35 for the day — was the single highest-selling item on Amazon, while Echo sales overall were seven times higher than the previous year.

The Echo’s continued strong performance on Prime Day shows the impact of the device’s growing install base, and points to factors that will affect its future growth:

  • This could be the beginnings of a bandwagon effect. BI Intelligence estimated that about 9 million households in the US owned an Echo product a few months ago, and that figure has only continued to rise. As more and more people see friends and family use these devices, they become more likely to embrace the technology themselves, and a sales event featuring steep discounts is a low-cost opportunity to try out a smart speaker.
  • Amazon could be seeing its “Alexa in any room” strategy paying off. The Echo Dot was first introduced as a complementary product to the Echo (which is why at first, the Echo Dot could only be ordered through another Alexa device). Though many consumers are buying the Echo Dot to stand alone, others are using it to expand their personal Alexa ecosystems — 29% of US respondents owned both an Echo and an Echo Dot, according to an exclusive February BI Intelligence survey.

Adoption of Echo devices seems to be driven at least in part by pricing, with the low-cost Echo Dot leading the way. At the same time, Amazon is reportedly looking to update the original Echo to make the smart speaker smaller and more competitive with Apple’s forthcoming HomePod, including a better speaker, microphone, and more sleek design. While Amazon needs to keep the flagship Echo up to date, the Echo Dot seems to be driving much of the Echo line’s growth and spreading Alexa ecosystem, which has over numerous compatible smart home devices, over 15,000 skills, and a growing stable of developers. Keeping costs down will only grow its expanding footprint.

BI Intelligence, Business Insider's premium research service, has compiled a detailed report on the US smart home market that:

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  • Forecasts future growth in the number of smart home devices installed in American homes.
  • Analyzes the factors influencing the proliferation of voice control devices in the homes.
  • Identifies and analyzes the market strategies of various companies that have integrated voice control into their smart home ecosystems.

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