Amazon’s Challenge To Apple’s AirPods = More Time For Content

Amazon is planning to challenge Apple in the wireless earbud market. If Amazon is successful, it will free up a great deal more of consumers' time that they will fill with content consumption.

That will help propel the trend toward audio content marketing.

It appears Apple will now have serious competition for a product that has been a smash hit for the company in the wake of declining phone sales.

Bloomberg's Mark Gurman reports:

The Seattle-based e-commerce giant is readying earbuds with built-in Alexa access for as early as the second half of this year, according to people with knowledge of the plans. The headphones will look and act similar to AirPods, but people working on the product inside Amazon are striving for better audio quality, the people said. Like the AirPods, the Amazon earbuds are designed to sit inside users’ ears without clips around the ear.

There are plenty of reasons to believe Amazon will be successful entering this market.

Amazon Will Undercut Apple On Price

While Apple has a huge jump start, the market for wireless earbuds is still growing.

Apple only recently announced voice-activated access to Siri with the release of its second-generation AirPods, so the voice-activated earbud market is still largely untapped.

I own a MacBook Air, an iPhone and two iPads. When I need a peripheral or a replacement charging cord, I buy it at Amazon. Their knockoffs are much less expensive than Apple's products and just as good.

If Amazon's earbuds sell at $49 versus Apple's $159, then it's a no-brainer.

Echo's Market-Leading Installed Base

Amazon already has a huge installed base of existing Echo users who would gladly take Alexa along with them wherever they go.

Amazon is the clear leader in smart speakers, though Echo's share dropped due to competition from Google Home. According to Voicebot.ai:

The top two smart speaker makers in the U.S. remained Amazon and Google in 2018 although their combined market share did dip from 90% at the end of 2017 to 85% one year later. Amazon Echo smart speaker owners represented 61.1% of U.S. adults while Google Home notched a 23.9% share. The figures represent a market share loss for Amazon Echo of nearly 11% while Google Home accounted for about half of the decline by rising 5.5% during the year.

Chart: Smart Speaker Market Share by Brand

Ad you can see, the Apple HomePod is lumped together with Sonos in the Other category.

The Alexa Habit

Here's a personal anecdote from this first-generation Echo user.

Several years ago, while walking to my bus stop after work and thinking about playing football during the weekend, I nearly spontaneously blurted out to the air in general, "Alexa, what's the forecast for the weekend?"

This is how powerfully Amazon's smart speaker technology has shaped its users' behavior. Alexa everywhere, obviously taps into that and creates more loyal consumers by offering an essential utility.

Apple users have not been trained this way because before the launch of the Siri-enabled AirPods 2, iPhone users have always had to deal with the friction of needing to launch the Siri app before asking it anything.

Echo users likely have similar experiences that already demonstrate the value of being able to take Alexa with them whereas Apple users do not.

Voice Commerce

The most powerful feature for Amazon, however, may be voice commerce.

With Alexa-enabled earbuds, users will be able to easily add products to their Amazon shopping cart at the very moment they realize they need something, regardless of where they are.

Everyone has had the experience of spontaneously realizing a certain staple needs to be refilled but because you are otherwise occupied, you cannot write it down and it is soon forgotten.

No more:

  • "Alexa, add toothpaste to my cart," you say as you take a left turn,
  • Or your friend has a book recommendation for you over coffee,
  • Or the podcast you are listening to just mentioned a cool tool you want to check out.

These lost retail moments are far more easily saved with voice-activated earbuds.

Alexa Skills

Amazon has an existing community of developers extending the value of the Alexa voice-activation technology by creating a wide variety of "skills" (or apps) for the platform.

TechCrunch reported in January that the number of Alexa skills more than doubled in 2018.

Amazon announced at the end of 2018 that the Alexa ecosystem had grown to more than 70,000 total skills internationally.

Chart: Amazon Alexa Skills, 2019
Graphic courtesy of Voicebot.ai

While most existing skills should work perfectly fine in an earbuds environment, it will be interesting to see if developers take advantage of the presumed geo-targeting functionality that would be available for a wearable product.

Audio Content

In addition to the third-party audio content that will be available Amazon's earbuds via Alexa skills, Amazon has plenty of its own audio content it can deliver to users:

  • Audible subscribers will no longer have to launch their app to listen to books on the go,
  • Amazon Music is available as an unlimited stand-alone music streaming service and as a limited service for free to Prime users.

But the biggest benefit for marketers is the effect a serious AirPods competitor will have in freeing up consumers' time for them to consume more audio content. The other effect this competition will have is in setting consumer expectations that they should have access to voice-activation technology wherever they are.

The University of Florida and Futuri Media conducted a survey of 2,000 podcast listeners on behalf of the National Association of Broadcasters and found that while listening to podcasts at home was the most common listening location, you can see that nearly all of the the other categories were while on the go:

  • While driving,
  • While walking,
  • While exercising,
  • While at work,
  • While on public transportation.

These away-from-home categories are surely to grow as market penetration for voice-activated earbuds grows.

Chart: Futuri Media Podcast Listening Locations

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About David Erickson

David Erickson is principal of e-Strategy Media, a digital marketing consultancy based in Minnesota. David has extensive experience in digital marketing and is often used as an expert source by media and asked to speak on the topic before organizations and to sit on panel discussions.