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One of the world's largest multinational investment banks urges two of the biggest technology giants in the market of the smart house to make war. its investors advocate a first strike. In an unusually dramatic note this week, Morgan Stanley argued that Google's parent company, Alphabet, should simply give away its signature Google Home Mini devices free of charge to disrupt Amazon's dominance in the smart speaker market .
"The growth of voice shopping combined with the expected benefit of Amazon's installation base could threaten the long-term growth of the consumer products research category monetizers of 39, "Alphabet," said analyst Brian Nowak. As the mobile transition when Alphabet gave Android to OEMs and started paying Apple to boost Safari research, we believe that Alphabet should give a Google Home Mini to all US households (globally). "
The company's projections are quite spectacular." Nowak estimates that Amazon will fully control over 60% of the US smart enclosure market by the end of 2018, leaving Google ranks second at 33% .Its analysis also predicts that over 70% of US homes will own a smart speaker by 2022.
Here's how you know how big is the size of Morgan Stanley: Nowak says this preemptive strike will cost "just" $ 3.3 billion to Alphabet, deemed "a small price to pay" for the occasion. "These homes might be less likely to adopt a Google Home … even though it was free, "he said.
Now you might think," Cool, a free smart speaker! "Not so fast. The purpose of smart speakers is directing detail searches and user data to the manufacturer's services Morgan Stanley predicts that Alphabet will bring $ 44 billion in retail research revenue up to 2022, or nearly $ 16 billion in operating profits. When we apply these figures to Morgan Stanley's scheme, this means that Alphabet could make more than five times its initial $ 3.3 billion investment by capturing a larger share of the market.
"We believe that voice shopping is accelerating the adoption of e-commerce. the only question is whether / how much Alphabet will participate in the monetization of the vocal trade, "he said. "More aggressive investing in a Google Home Mini gift could also drive the sum of the parties [valuation] narrative."
In other words, your smart speaker is not just a conduit for e-commerce data and resources, they are also leash keeps customers related to the range of services of the manufacturer of the device. Fortune has even suggested that Google could bundle a Home Mini to its new Premium YouTube Subscription Service, just one more offering from a Google subsidiary that Morgan Stanley is pricing as a $ 160 billion asset.
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