Alibaba unveils Echo competitor
Alibaba (BABA) has moved to challenge Amazon (AMZN) and Alphabet’s (GOOGL) Google in the smart speaker market with a device called Tmall Genie X1. Alibaba’s Tmall Genie X1, which is set to enter the market in August, is positioned as a challenger to Amazon’s Echo and Google’s Google Home devices.
Alibaba’s move with Tmall Genie X1 adds to the growing list of companies eyeing the smart-home systems market. In June 2017, Apple (AAPL) unveiled its Echo competitor, called HomePod, and Microsoft (MSFT) is also believed to be preparing to launch its own voice-controlled smart speaker. Baidu (BIDU) and Tencent (TCEHY) have also shown that they are eyeing the smart speaker market.
A $155.0 billion revenue opportunity
There are billions of dollars to be made in the smart speaker market, which could be attracting Alibaba as it tries to diversify its revenue sources. According to consulting firm Strategy Analytics, the market for smart-home systems such as voice-controlled speakers could grow to $155.0 billion by 2020 from ~$90.0 billion this year, as illustrated in the chart above. The forecast figure includes spending on hardware, services, and installation fees.
Reducing reliance on e-commerce
Alibaba currently relies on e-commerce sales for the majority of its revenues, and it contributed 82.0% to the company’s overall sales in fiscal 4Q17.[1. fiscal 4Q17 ended March 2017] Therefore, a successful break into the smart speakers market could contribute to making it less reliant on e-commerce.