Could Google Home Threaten Amazon Echo’s Lead?

Google Home

Alphabet’s (GOOGL) Google has begun making moves in the home assistant market that could challenge Amazon’s (AMZN) lead. Echo, Amazon’s voice-enabled smart speaker, has largely been seen as dominating the home automation systems market, as it boasts far more features and skills than the competition. Echo owners can use it to shop online, read tweets aloud, control lights, and play music.

However, Google has recently updated its rival device, Google Home, bringing the ability to shop online from more than four dozen retailers by placing voice orders. Participating major retailers include Whole Foods (WFM), Costco (COST), and Walgreens (WBA). These updates have also enabled Google Home owners to use their devices to find nearby stores that stock the items they want.

Could Google Home Threaten Amazon Echo’s Lead?

Threat to $10 billion predicted for Echo business

Home assistant devices such as Echo and Google Home are designed to bring convenience to the lives of their users. The more features and skills a device boasts, the more useful it becomes. Therefore, Google’s enabling voice-assisted online shopping via Google Home has reduced Echo’s competitive advantage.

If a recent projection by RBC Capital Markets analysts is anything to go by, Google’s move threatens the $10.0 billion in new revenue that analysts saw Echo bringing to Amazon in the next five years.

The market for home automation devices is expected to grow to $78.3 billion by 2020 from $32.1 billion in 2015, as illustrated in the above chart, according to MarketsandMarkets estimates.

Revenue diversification

For Amazon and Google, expanding into home automation systems is a way to diversify their revenue streams as competition grows more intense in their core operations.