Smart speaker's 'price war' is in progress. Recently, JD.com released two new smart speaker products. Among them, JD.com mini2 reduced the price of smart speakers to less than $100 during the pre-sale period and opened at a discount price of RMB 79. Sale. So, is the price battle good or bad for smart speakers?
Intensified price war
Last year was the year in which smart speakers concentrated on the domestic market. After the 'Box Wars', the incoming players are still intensively introducing new products. Smart speakers are expected to continue their strong momentum this year.
However, with the influx of BAT and other giants and a large number of smart hardware manufacturers, smart speakers have already entered the price reduction channel, and have become increasingly fierce.
Nail Technology noticed that during the double 11 years of last year, Ali’s smart speaker Tmall Elf X1 set a million sales records, but the price paid behind it was to reduce the price from the original price of 499 yuan to 99 yuan, which is a typical subsidy price. Attract consumer promotions.
At the same time, another major e-commerce giant Jingdong also 'under the blood' stimulated the sales volume of 叮咚 叮咚 speaker, 双 TOP smart speaker during the original price of 399 yuan during the double 11 to the Jingdong Plus member out of a 49 yuan discount price.
In addition, in March this year, Xiaomi still continues the previous cost-effective style, its launch of small love speaker mini to the market price of 169 yuan, more during the rice season will be reduced to 99 yuan.
And Baidu CEO Robin Li announced in the new conference of smart speakers that Baidu and Xiaoyu’s joint release of 'small homes' was priced at RMB 599 yuan from RMB 1,599.
At present, a new round of price wars has begun for domestic smart speakers, and this competition with the theme of 'price war' seems to have become the development characteristic of smart speakers at this stage.
It is also foreseen that the domestic smart speaker price war will intensify. This year, whether it is 618 or Double Eleven, Double XII and other 'promotional festivals', are the timing nodes of the smart speaker fierce competition, and the competition of various giants The strategy will also continue to be around 'cost-effectiveness' and 'burning subsidies'.
The decline in prices is conducive to market penetration
At this stage, although the smart speaker in the country is not like home as the 'standard' in the United States, but the market development is quite rapid. According to the national retail monitoring data previously released by the market research institute GFK, the 2017 China smart speaker market retail volume With an average of 1.65 million units, the monthly average zero sales volume shows a clear upward trend. In addition, GFK expects that the market size of smart speakers in China will continue to increase to 5.88 million units in 2018.
Of course, the smart speaker market, which is still hot, is still based on the price/price ratio and preferential subsidy strategy. However, similar price wars seem to be non-failed. Because in China, to seize the market, the price war seems to be effective forever.
In the view of Nail Technology, the large number of promotional price cuts currently on the market, that is, price wars waged by giants, may be mainly for two purposes. On the one hand, the use of cost subsidies can be relatively faster. 2. After all, low-priced products are the weapons that seize market share.
On the other hand, there are many smart speaker products that have just started. It is necessary to understand user needs by collecting user data to optimize the product experience. Basically, this can also be seen as 'make up'.
For these giants, once a sufficient scale of users is formed, not only can the right of the supply chain and developers be heard, but also product-level rapid update iterations can be implemented to further build their own competition barriers.
After all, the smart speaker market in China is still in the early stages of development. It is imperative for manufacturers to cultivate user habits and improve user awareness, so as to jointly promote the popularization of smart speaker concepts, and continue to make this 'cake' bigger. The price cut brought by the price war can stimulate the consumers' desire to purchase smart speakers, and has a certain role in promoting the early development and subsequent popularization of the smart speaker market.
In addition, e-commerce giants such as Alibaba, Jingdong, and Suning have natural channel advantages. Combined with large-scale promotions, they are expected to push the smart speaker market to a higher level.
Two problems brought by price war
Nail Technology believes that 'smart speaker' includes three levels: the bottom layer is hardware parameter technology, such as awakening rate, wake-up distance, etc.; the middle layer is application services, mainly including content and smart home systems; the upper layer is intelligent, covering natural language recognition. , Interaction, Intelligent Management, Personalized Recommendations, etc.
At present, it seems premature to talk about the overall ecology of smart speakers, and the underlying technology it carries is not yet perfect. Most smart speaker products in the market currently have far-reaching recognition differences, high false positive rate, and continuous dialogue. Functional instability, poor semantic understanding, poor sound quality, etc. The seemingly burgeoning smart speaker industry is facing challenges such as weak innovation, poor product experience, low content and functionality, and low user awareness.
Subsidies used in the industry, such as price reduction strategies, of course, can reduce the purchase threshold for consumers, but it also means that the cost is limited and strict control. Nail Technology believes that this will bring the following two problems.
First, the lack of product polishing will make it less innovative and increase the degree of homogeneity, which will trigger a round of price wars and become vicious in the short term.
In fact, as mentioned above, at a low price, the subsidy strategy can help manufacturers gain traffic growth and understand user demand in the short term. In this case, the key lies in whether the manufacturers can carry out timely and effective ' Make up the class', whether the speed of the product update iteration is fast enough and if the intensity is enough.
Second, if we pursue the product's low price blindly and ignore the product experience, it will reduce the market's enthusiasm for smart speakers, which is very unfavorable to the long-term development of the market.
After all, providing a good user experience is a basic quality that any product should have, and for a smart speaker market that looks promising, it needs a better product and user experience.
In summary, the key to smart speaker competition lies in the user experience. If it is not possible to further optimize the product and enhance the user experience, most smart speaker brands will inevitably be 'discarded' by users. In the long run, the 'irrational' price war is not Facilitate the development of the industry.