Amazon (AMZN) is gearing up for its highly anticipated event tomorrow, which is slated to take place at the company’s Seattle headquarters at 1:00 PM EDT. The annual Amazon hardware event focuses on the company’s product launches, and the market expects some big announcements.
Earlier this month, Amazon announced its new Fire TV Cube and a new lineup of Fire TV devices. Last year, the company announced a fresh Echo Line up along with a Fire TV Recast and an Alexa-powered microwave and wall clock. We expect Amazon to take a leaf from last year’s event and announce a massive product overhaul this year to capitalize on the fast-approaching holiday season.
What’s in store at tomorrow’s hardware event?
Amazon might treat its customers to the highly anticipated Echo smart speaker tomorrow. The new Echo device is likely to be bulkier with superior audio quality.
The company may also announce an updated version of the Standard Echo with a sleeker form factor, more smart home features, and enhanced power. The market expects Amazon’s high-end Echo speaker to contend with the Apple HomePod and the Google Home Max.
Today, CNBC revealed that Amazon announced plans to include health and fitness features in its upcoming earbuds. It did not explain whether the devices will be wired or wireless, but it stated that the earbuds would cost less than $100. What’s striking is the fact that Amazon is making its official foray into the health-device segment.
The new earbuds and the Echo smart speaker are very much aligned with Amazon’s Alexa-oriented strategy. The company wants its voice assistant to be ubiquitous. The new earbuds would allow you to access Alexa on the go.
Meanwhile, the new Echo device will be a powerful device in Alexa’s smart home arena. Amazon wants to go a step ahead and turn Alexa into a more personalized device, opening new opportunities in spaces like grocery stores, restaurants, and theaters.
In July, Bloomberg reported that Amazon is working on its first home robot. The company is tentatively calling the robot Vesta, and there are rumors that Amazon would design it like a mobile Alexa. Let’s see whether Amazon releases a teaser of the robot in tomorrow’s highly anticipated event.
Could Alexa see enhanced privacy settings?
In April, Amazon faced severe criticism amid news that human audio reviewers listen to some of the recordings of users’ conversations with Alexa. User privacy is a hot-button issue, which companies must address with sensitivity.
Amazon introduced a series of privacy-friendly features to mitigate customer concerns. So, we can expect Amazon to announce additional upgrades to Alexa’s security and privacy settings.
Tomorrow’s event likely to focus on Alexa and Echo
I expect tomorrow’s event to revolve around Alexa and Echo. Amazon is the undisputed leader in the voice assistant market. Consumer Intelligence Research Partners (or CIRP) estimated that Amazon Echo/Alexa controlled 70% of the smart speaker market in the US. Other prominent players in the market are Google Home and Apple’s HomePod.
Amazon is making a concerted effort to maintain this market dominance. Mark Mahaney, an analyst at RBC Capital, predicts that Alexa’s total sales would be $18 billion–$19 billion by 2021. He expects Alexa to contribute 5% of Amazon’s total revenue.
Another reason why Amazon depends so much on Alexa is that it believes that Alexa would spur voice-assisted sales. Amazon’s devices chief Dave Limp stated that Alexa’s influences customers to buy more products. Alexa’s growing demand has also fueled related sales such as music and audiobooks from the e-commerce giant.
As Amazon has recently launched Fire TV device upgrades, we don’t expect any news on that front tomorrow. Last year’s Amazon Hardware Event saw some surprise launches like the Alexa-powered microwave and wall clock. We’re all ears for any similar surprises that Amazon might announce in tomorrow’s event.
Will the hardware event lead Amazon stock higher?
Amazon lost 0.5% yesterday after Morgan Stanley analyst Brian Nowak reiterated an “overweight” rating on the stock. Today, Amazon stock is still in negative territory.
This sentiment weighed on the entire technology sector and dragged Apple, Google, Facebook, and Netflix lower. We need to watch out if tomorrow’s event ignites optimism among investors and pulls Amazon stock into the green.