March 28, 2017
With operators in the UK continuing to scrap and scrimp to recoup the lost fortunes of yesteryear, search giant Google has sauntered across the pond and is looking to make a play for the smart home gateway.
Google Home is almost available for UK consumers, effectively replicated the much advertising Amazon Alexa/Echo proposition. The hands-free smart speaker powered by the Google Assistant will essentially act as the new interface to bolster the internet giants fortunes, tapping into Search, Maps and Translate products to build revenues in its traditional manner, but now with a modern twist.
The team has also introduced Google Wifi to improve wireless connectivity throughout the home. Using Wifi-mesh technology, point creates a high-powered connection, and the different Wifi points work together to determine the best path for your data. This, in theory should allow for connectivity in parts of the home which were more difficult using traditional means. Both products will be available in the UK from April 6th.
Telcos around the world have previously made their fortunes through a more product orientated business model, however with the disruption of the OTTs and a more digitally-enabled environment, those monumental profit margins are looking a thing of the past. The transition towards a service orientated business model, making use of mountains of customer data, is a logical step, however Google is looking to swoop in and steal the business before the telcos have even had a chance.
The idea here would be to replicate what Facebook has done with social media. In this instance, Facebook has created a sturdy walled garden, charging premium prices for advertisers and partners to access the user. The data stash can be used to create personalized adverts to move away from less efficient over-the-top advertising strategies. With the emergence of the IoT-world, in particular the smart home, the telcos do have the opportunity to replicate this business model in the ‘offline’ world. Assuming Google doesn’t beat them to the punch.
“Google Home is a hands-free smart speaker powered by the Google Assistant that does just that,” said Suveer Kothari Director, Product Partnerships & Planning for Google Home.
“Whether you want to get answers from Google, turn up the music, sort out some everyday tasks or control compatible smart devices in your home, all you have to do is say “Ok Google.” And now, Google Home is coming to the UK.”
While the majority of telcos will most likely put on a cool and calm face, welcoming the challenge as a catalyst for self-improvement and innovation, this is a worrying sign. The smart home was always going to be an area of growth for the digital economy, and the telcos looked like a perfect segment to capitalize on the fortunes. They’ve been the connectivity provider for years, so it could be a logical transition. But it looks like they are not acting quick enough.
The major worry here is the element of trust in the brands themselves. On one hand you have the telcos who have woeful reputations for customer service, get caught by Ofcom overcharging too frequently, been the victim of data breaches on numerous occasions and fund advertising campaigns which could be seen as misleading and frustrating.
Elsewhere you have Google. The world’s most successful search engine, which does have a few faults, but has a well-respected and credible reputation. The prominence of Google Play through the Android operating system is beginning to normalize the idea of giving Google your credit card details, and if you trust Google with your browsing history, there probably isn’t much you won’t trust them with.
The telcos have been looking to diversify their own business models to bolster dwindling profit margins, while Google has been looking to new areas to continue to momentum it has gathered through traditional search advertising. The smart home is an area where there can be some serious cash made, and once again it looks like we’ll be saying the telcos were just a little late to the party.
How much of an opportunity for the telcos is the smart home to diversity away from the traditional business models?
1 (Over-hyped) (32%, 7 Votes)
5 (massive opportunity) (23%, 5 Votes)
4 (18%, 4 Votes)
3 (14%, 3 Votes)
2 (14%, 3 Votes)
Total Voters: 22
With Amazon and Google launching smart home initiatives, have the telcos missed out on their chance to cash in on this market?
Yes, Google and Amazon will now dominate this space (65%, 40 Votes)
Consumers won't have made up their mind (19%, 12 Votes)
No, Google and Amazon will not be able to replace the telcos in the mind of the consumer (16%, 10 Votes)
Total Voters: 62
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