The "price war" of smart speakers is underway. Recently, JD.com released two new smart speakers, among which JD Dingdong mini2 once again reduced the price of smart speakers to less than 100 yuan during the pre-sale period, and sold them at a preferential price of 79 yuan. So, is the price war good or bad for smart speakers?
Intensifying price war
Last year was a year when smart speakers broke out in the domestic market. After the "hundred-box war", entrants are still intensively launching new products. Smart speakers are expected to continue their strong momentum this year.
However, with the influx of giants such as BAT and a large number of smart hardware manufacturers, smart speakers have already entered the price reduction channel, and there is a growing trend.
Ding Technology noticed that during the Double Eleven last year, Ali’s smart speaker Tmall Genie X1 set a million sales record, but the price behind it was to reduce the price from the original price of 499 yuan to 99 yuan, which is a typical subsidized price. Promotional strategies to attract consumers.
At the same time, another major e-commerce giant JD.com also "spent the money" to stimulate the sales of Dingdong speakers. During Double Eleven, the original price of Dingdong TOP smart speakers was 399 yuan and offered a preferential price of 49 yuan to JD Plus members.
In addition, in March of this year, Xiaomi continued its previous price-performance style, with its Xiaoai speaker mini hitting the market at a price of 169 yuan, and even lowered the price to 99 yuan during the Mi Fan Festival.
And Baidu CEO Robin Li also announced at the previous smart speaker new product launch conference that the price of "Xiaodu at Home" jointly released by Baidu and Xiaoyu at Home was reduced from 1,599 yuan to 599 yuan.
At present, a new round of price wars for domestic smart speakers has started, and this competition with the theme of "price wars" seems to have become a feature of the development of smart speakers at this stage.
It is also foreseeable that the price war of domestic smart speakers will intensify. This year, whether it is 618 or Double Eleven, Double Twelve and other "promotion festivals", it is a time node for the fierce competition of smart speakers, and the competition strategies of various giants will still focus on "cost-effectiveness" and "burning subsidies." To unfold.
The price drop is conducive to market penetration
At this stage, although smart speakers do not become the “standard equipment†of families in China like the United States, the market is developing quite rapidly. According to the national retail monitoring data previously released by the market research organization GFK, the retail volume of China's smart speaker market reached 1.65 million units in 2017, and the monthly average zero sales showed a clear upward trend. In addition, GFK predicts that China's smart speaker market will continue to grow in 2018, reaching 5.88 million units.
Of course, the hot smart speaker market is still exchanged for cost-effective and preferential subsidy strategies, but price wars like this seem to be indispensable. Because in China, to seize the market, price wars seem to be effective forever.
In the view of Ding Technology, the large number of promotions and price cuts currently existing in the market, that is, the price wars fought by giants, may be mainly for two purposes. On the one hand, cost subsidies can be used to move volume relatively faster. After all, low-priced products are the weapon to seize market share.
On the other hand, there are many smart speaker products that are just starting out, which need to collect user data to understand user needs and optimize the product experience. This can basically be regarded as a "make up lesson."
For these giants, once a sufficient user scale is formed, it will not only enhance the right to speak to the supply chain and developers, but also achieve rapid update and iteration at the product level, thereby further building their own barriers to competition.
In the final analysis, the current domestic smart speaker market is still in the early stages of development. The top priority for manufacturers is to cultivate user habits and enhance user awareness, so as to jointly promote the popularization of smart speaker concepts and continue to make this "cake" bigger. The price reduction brought about by the price war can stimulate consumers' desire to purchase smart speakers, and it 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, JD.com, and Suning have natural channel advantages, combined with large-scale promotional activities, are expected to push the smart speaker market as a whole to a higher dimension.
Two problems that the price war will bring
Nail Technology believes that "smart speakers" include three levels: the bottom layer is hardware parameter technology, such as wake-up 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 recommendation, etc.
At present, it seems too early to talk about the overall ecology of smart speakers, and the underlying technology it carries is not yet perfect. Most smart speaker products on the market currently have problems such as poor far-field recognition, high false wake-up rates, unstable continuous dialogue functions, poor semantic understanding, and poor sound quality. The seemingly popular smart speaker industry is facing many challenges such as weak innovation capabilities, poor product experience, insufficient content and functions, and low user awareness.
While the subsidies and price reduction strategies adopted in the industry can certainly lower the purchase threshold for consumers, it also means that the cost is limited and strict control. Nail Technology believes that this will bring about the following two problems.
First, the lack of polishing of the product will result in insufficient innovation and deepening of the degree of homogeneity, which will trigger rounds of price wars and fall into a vicious cycle in the short term.
In fact, as mentioned above, the strategy of low prices and subsidies can help manufacturers obtain traffic growth and understand user needs in a short period of time. In this case, the key lies in whether manufacturers can "make up lessons" in a timely and effective manner, whether the product update iteration speed is fast enough, and whether the intensity is strong enough.
Second, if you blindly pursue low product prices and ignore product experience, it will reduce the market’s enthusiasm for smart speakers, which is very detrimental to the long-term development of the market.
After all, bringing a good user experience to users is the basic quality that any product should have, and for the smart speaker market that seems to have a bright future, a good product and user experience are even more needed.
In summary, the key to smart speaker competition lies in user experience. If products cannot be further optimized and user experience enhanced, most smart speaker brands may inevitably be "abandoned" by users. In the long run, "irrational" price wars are not conducive to the development of the industry.
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