Google should give every household in the United States a free Google Home Mini if it wants to beat Amazon in the emerging smart speaker industry, according to Morgan Stanley analyst Brian Nowak.
Google will spend a lot of money with such a plan, but according to Nowak, the payoff will be worth it. Whether Google will heed the analyst's advice, however, remains to be seen.
Free Google Home Mini For Everyone
In a note to investors, Nowak wrote that Alphabet should give a free Google Home Mini smart speaker to all households in the United States, because Google is losing ground to Amazon in terms of retail search queries.
The Google Home Mini currently comes with a $49 price tag, so the plan will cost Google about $3.3 billion. The massive figure, however, was described by Nowak as a "small price to pay," as Alphabet will earn about five times that amount in the next five years through the profits generated from retail search results.
"The growth of voice shopping combined with Amazon's expected install base advantage could threaten long term growth in Alphabet's high-monetizing retail search category," Nowak wrote. He estimated that Amazon will have a 62 percent share in the smart speaker market in the United States by the end of 2018, compared to 33 percent for Google, and that over 70 percent of households in the country will have a voice search-enabled smart speaker by 2022.
Free Google Home Mini smart speakers will allow Google to catch up with Amazon by serving as avenues for more search revenue and voice shopping opportunities. With an increasing number of online purchase made through voice, the $3.3 billion initial cost of giving away Google Home Mini devices may pounce on an even more lucrative opportunity for Google.
Google Home Vs Amazon Echo
Google has been hard at work in improving its Google Home line of devices, with new features such as continued conversation to no longer require users to say "hey" or "ok" every time and the recent addition of the Spanish language. There are also rumors that Google will soon launch a Google Home with screen.
Despite these improvements, it remains to be seen whether Google will be able to take over Amazon's dominance in the smart speaker space. The Google Home vs Amazon Echo debate rages on, and free Google Home Mini speakers for everyone might soon become an even more feasible plan for Google as the market expands.