The smart home segment is beginning to gather pace and the leaders are already comfortable. But for every winner there will likely also be a loser so where does Google fit into the mix?

Jamie Davies

February 27, 2017

4 Min Read
Amazon could cause Google search advertising problems – Openet

The smart home segment is beginning to gather pace and the leaders are already comfortable. But for every winner there will likely also be a loser so where does Google fit into the mix?

Google’s rise to prominence came fast and furiously. The effectiveness of its search engine beat the competition into submission, so much so, the phrase ‘Google it’ is commonplace. Like Hoover and Sellotape, it is a company whose dominance is so clear the brand has dwarfed the industry itself. But can this prominence in the search world be transferred to the smart home segment? Talking at MWC 2017, Openet CEO Niall Norton thinks it might be a tricky transition.

The battle for control of the living room gateway is already heating up with Amazon taking a strong position with its Echo and Alexa offerings. Google is trying its best with its own personal assistant, but it’ll have to be happy with second place for the moment. According to Norton, this is not an accident. Amazon has a stronger brand in the home and it is capitalizing on this currently.

Losing out on this segment isn’t the end of the world in the first instance. Google still has a serious search advertising business which brings in mountains of cash, and this is unlikely to change in the near future. But as the voice interface becomes more commonplace in the everyday lives of the consumer, the browser search engine becomes less prominent. Why open up a browser when you can just ask Alexa to do the legwork for you?

“I would never ask Alexa to go to Google and find me the nearest Italian restaurant,” said Norton. “Alexa will just use its own default search settings, and will then control the revenues driven off the back of those searches.”

Now the odd Irishman looking for an Italian restaurant is not a disaster, but the technology is catching and catching quickly. Amazon has fine-tuned the offering over the last couple of months, and it is now a family-friendly proposition which is simple to use. The more widespread the use of Alexa becomes, the more advertising revenues at Google are chipped away.

And it doesn’t stop with Amazon. What about Microsoft’s Cortana? Or Apple?

“Siri is the most underexploited tool Apple has at its disposal,” said Norton. “Voice interface will be one of the most prominent trends over the next couple of years, and Apple has a very loyal customer base which puts it in a strong position.”

While it may be a slight worry for the Google business, many will point out that it does in fact command an army of very intelligent engineers who could set their sights on the smart home segment. But for Norton, the Google brand isn’t necessarily strong enough to take it into the space.

“Do I trust Google enough to give it my credit card details? No,” said Norton. “I trust Amazon and I trust my mobile operator, but not Google. This is a problem in the smart home area where buying decisions will eventually be coupled with the technology.”

This isn’t necessarily too bold a claim either. The Google team has tried to take the business into new segments on the strength of the brand, and the results have been less than flattering. Think of the Google smartphone move, the jury is still out there. But what about the fibre ambitions in the US, not exactly a screaming success.

While this is a damning view of the internet giant, there is hope. In the mobile world, Android is the dominant operating system, trusted by hordes around the world. A lack of brand credibility doesn’t seem to have impacted the OS business.

“The real triumph of Android is that not many people realise it is Google,” said Norton. “The same could be done in the smart home market. Another brand could be created to separate the business and capture the attention of the consumer.

The simplicity and accessibility of virtual assistants and the voice interface will create a significant amount of money to be fought over. As with any major transition such as this, new companies will emerge and the status quo will be challenged. Google execs won’t be losing sleep at the moment, but it certainly has some catching up to do if it’s going to catch Amazon.

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