Google and Amazon Clash in Brazil over Smart Speaker Dollars



Brazil has become the latest battleground for Google (GOOGL) and Amazon (AMZN) as they compete for control of the lucrative smart speaker market. Google’s Nest smart speakers went on sale in Brazil yesterday. Google has picked some of Brazil’s well-known retailers, including Magazine Luiza, to help it sell Nest speakers in the country.

Google smart speakers’ arrival in Brazil comes on the heels of Amazon launching its Echo smart speakers there. As Latin America’s largest economy, Brazil is undoubtedly an attractive market for technology companies such as Google and Amazon.

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Google sees Brazil as an important market

Smart speakers’ uptake has continued to rise around the world, fueling growth in Google’s hardware business. Allied Market Research estimates the global smart speaker market’s value was $4.4 billion in 2017 and will reach $23.3 billion by 2025. Currently, Amazon and Google are the world’s top smart speaker companies, with 21.9% and 18.5% of the market, respectively. China’s Baidu (BIDU) rounds out the top-three list with a 15.3% share. Alibaba (BABA), Xiaomi, and Apple are some other major smart speaker companies.

Baidu and Alibaba, Google’s and Amazon’s main challengers, have not yet entered the Brazilian smart speaker market. We think Google could take advantage of the limited competition in Brazil to grow its smart speaker sales.

Hardware business crucial to Google’s revenue diversification push

Google’s smart speaker business is a big part of its efforts to diversify its revenue. Presently, Google derives most of its revenue from advertising. However, the ad market is becoming more competitive and subject to regulatory challenges.

In Brazil, the Google-Amazon rivalry goes beyond the smart speaker market. The companies also have their sights on Brazil’s cloud computing market, which is the fastest growing in Latin America. Alibaba is also pursuing cloud dollars in Brazil.


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