Google Home Mini and Max — It’s All About Price

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At Wednesday’s introduction of the Pixel 2 smartphone, Alphabet Inc. (NASDAQ: GOOGL) and Google also sneaked in two new devices in its Google Home product line. The Home Mini is a $49 voice-controlled speaker and the Home Max is a $399 device that includes all the features of the Home Mini plus far more powerful sound capabilities.

It’s not too hard to figure the market the Home Mini is aiming at. Amazon.com Inc.’s (NASDAQ: AMZN) Echo Dot is another hockey puck-sized speaker selling for the same price — a price point well below the original Google Home device.

The Home Mini will be available at retail on October 19 and the Home Max launches in the United States in December with a free, 12-month subscription to YouTube Red to sweeten the offer.

Senior IHS Markit analyst Paul Erickson noted that the Amazon’s ability to expand the footprint for its Alexa voice-recognition software quickly and cheaply with Echo Dot forced Google to come up with a competing product as quickly as possible. Erickson also said:

Though Google retains long-term ecosystem advantages for Google Assistant in the Android mobile device base, penetration of the Chromecast built-in standard, and presence across numerous platforms, it remained outgunned by Amazon in growing its footprint in the home via the increasingly important smart speaker market. … With the launch of Google Home Mini, Google now has rough parity with Amazon in terms of market-penetrating low-end affordability of its smart speakers …”

The story for the Home Mini doesn’t end there however. Amazon has bundled the Echo Dot with its Fire TV products at an “aggressive” price, noted Erickson, who believes that Google will have to make at least a similar offer in order to attract buyers.

The $399 Home Max now has the distinction of being the highest priced smart speaker on the market, displacing Apple Inc.’s (NASDAQ: AAPL) $349 HomePod, which had been knocked for being too expensive. But where Amazon and now Google have full product lines, Apple has only a single device priced way above the sub-$100 sector where all the action is. Erickson concludes:

Though positioning issues remain for both Home and Home Max, Google now joins Amazon in having a smart speaker line with both depth and affordability. Collectively, these two players continue to build a competitive environment that is increasingly maturing and strengthening ahead of Apple’s HomePod debut in December. The pressure is now on Apple to perform with HomePod and Siri, and the company’s performance in the smart speaker market in the Q4 holiday season will be a telling bellwether of the year to come.