Internet of Things

Amazon and Google Duke it Out for IoT Dominance

February 24, 2024

Amazon and Google Duke it Out for IoT Dominance

Introduction

The Internet of Things (IoT) market is heating up as two titans, Amazon and Google, battle for supremacy. As a connected home enthusiast, I’m excited to see how this competition will drive innovation and bring down costs. In this article, I’ll analyze the strengths and weaknesses of both companies in the IoT space and predict who will come out on top. There is a lot at stake – by 2020 there will be over 20 billion IoT devices and it will be a $263 billion market. The company that dominates IoT will be positioned to shape the connected future.

Amazon’s Alexa and Echo

Amazon has an early lead in the voice-controlled assistant space with Alexa and the Amazon Echo smart speaker line.

The Echo leverages Alexa’s voice recognition and artificial intelligence capabilities to create a hands-free experience for playing music, controlling smart home devices, obtaining information, audiobooks, weather, news, shopping lists and more. Amazon has iterated quickly and now offers Echo devices at various price points and form factors including the screen-enabled Echo Show.

Key advantages for Amazon:

First mover advantage: Released in 2014, Echo devices have rapidly proliferated into millions of homes. According to Consumer Intelligence Research Partners, over 30 million Alexa-enabled devices have been sold so far. The familiarity and habit of using Alexa will be hard for competitors to break.
Ease of setup: Setting up an Echo is extremely simple compared to other smart home hubs, increasing mainstream consumer appeal. Much of the heavy lifting like speech recognition occurs in the cloud rather than on the device itself.
Robust voice recognition: Alexa leverages machine learning and has gotten better over time at understanding natural voice commands, now claiming a 95% accuracy rate.
Thriving skill ecosystem: There are now over 40,000 Alexa “skills” (voice apps) available that enhance Alexa’s capabilities – from playing Jeopardy to ordering a pizza. This developer momentum will be hard for Google to match.

Google Assistant and Home

Despite a later start, Google is a formidable competitor in the voice assistant arena with Google Assistant and the Google Home speaker. Google Assistant is also available on Android phones and tablets.

Google’s key advantages:

Search expertise: Google’s search engine capabilities give it access to immense data and knowledge that Alexa lacks. For example, ask Assistant “Who’s winning the Giants game?” and you’ll get a real time sports update.
Artificial intelligence capabilities: Google has some of the top minds in AI, as evidenced by innovations like Google Translate. Its knowledge graph and machine learning prowess enable robust natural language processing.
Access to user data: Google has access to signed-in users’ preferences, location, calendar, inbox, photos, and more. This can enable a more personalized, context-aware experience.
Integrated with Android OS: Given Android’s mobile OS dominance, Google Assistant has an enormous potential user base. Alexa lacks this OS-level integration.

Comparing Smart Home Integrations

A key battleground is controlling the emerging smart home market – our thermostats, lights, appliances, security systems, and more. Getting a foothold here builds brand loyalty and ecosystem lock-in.

Amazon has the lead here with the most smart home partners integrated so far. Alexa can control over 10,000 unique devices from 1,200 brands. It takes an open ecosystem approach, welcoming products that support the Wi-Fi, Bluetooth or Zigbee standards.

Google is trying to catch up by expanding its Works with Nest program. But Google takes a more vertically integrated, proprietary approach than Amazon. This risks alienating smart home manufacturers wanting an open, flexible platform.

Who Will Win?

It’s still early days, but Amazon has key advantages that will be difficult for Google to overcome:

First mover and network effects: Alexa/Echo has gained amazing traction in millions of living rooms, which become hubs for controlling other devices.
Focus on the home: Amazon’s smart home skills and devices are far ahead of Google. Being central to the connected home builds loyalty.
Open platform: Amazon wisely chose an open approach that welcomes compatibility with third-party vendors. Google’s vertically integrated strategy risks turning off manufacturers.
Ease of use: Alexa’s plug-and-play setup and ability to operate hands-free even from across the room make it frictionless. Google needs to simplify its smart home integration and management.

That said, it’s not game over for Google. Its vast search and advertising business subsidizes its ability to invest for the long-term. Google is making strides catching up with its own partnerships and acquisitions. Its superior AI and data integration may yet give it an edge. But Google definitively has its work cut out for it if it wants to surpass Alexa in the home. This heavyweight battle is just getting started and consumers stand to benefit from the innovation it drives.