As Amazon extends its reach in India, in part betting on millions of smartphones it sells through its platform every year, the e-commerce giant is prepping to broaden its hardware strategy in the country.
Amazon India plans to launch Echo Dot and Prime Music in the country later this year, people familiar with the matter have told Gadgets 360 in recent weeks. The launch, where the company would unveil both the Echo Dot and Prime Music, could happen as soon as Diwali (mid-October), one of these people said.
The company has been testing the Echo Dot at its office in Bangalore for at least one month, another person familiar with the matter said. The Amazon Echo, the larger, more expensive smart speaker, won't be available in the country at the time of the launch, one of the people cited above said. Amazon India declined to comment last month.
The Echo Dot, available at present in the United States and several other markets, supports a range of music integrations and other skills. But most of the music services it supports -- including Spotify and Pandoro -- in Western markets are not available in India. Despite media reports to the contrary, Gadgets 360 understands Spotify has no plans to launch its service in India this year.
In India, the Echo Dot will support Prime Music and Gaana, people said. The Amazon Fire TV Stick, which the company launched in India in April, already supports Gaana on its platform. A person with direct knowledge of the matter said that several of the partners of Amazon for the Fire TV Stick will be onboard with the Echo Dot speaker launch as well. Apple Music and Google Play Music, both of which are available in India, are not available via Amazon's Echo devices internationally, and that will be the case in India as well.
The company plans to sell the Echo Dot at a price that is affordable to much of the Internet-savvy population of the country. News outlet FactorDaily reported on Wednesday about Amazon's plan to launch Echo Dot and the Echo in India during Diwali. The report claimed that the Echo Dot would be priced between Rs. 5,000 to Rs. 6,000. A source familiar with the matter told Gadgets 360 that the price of Echo Dot, available at $50 in the United States, will be under the Rs. 3,000 mark in India.
According to an estimation from investment banking advisory firm Evercore, the Echo Dot is sold at a price between 10 and 20 percent less than the cost of the hardware. But for Amazon, which failed to attract enough customers to its Fire phone smartphone in 2014, hardware remains a major desire, company executives have said at several quarterly earnings call.
Prime Music, which the company is planning to launch alongside the Echo Dot in India this year, is likely to be part of the Prime subscription service, which Amazon launched in India last year and has been offering at a discounted price of Rs. 499, which may be increased soon.
The Echo Dot will enable Amazon to find more diverse audience dataset for Alexa, the company's digital AI assistant, which rivals Apple's Siri, Google's Google Assistant, and Microsoft's Cortana. The company has been pouring extravagant resources in Alexa. It lost about $330 million on Alexa-powered devices and other associated expenditure last year, a figure that could run north of $600 million this year, according to Evercore.
One analyst was not surprised by the company's move. "Prime and Echo have been used as subsidised ways to suck people into the ecosystem elsewhere too, and although the economics of that subsidy may be a little more dramatic in India, it's the same fundamental strategy," Jan Dawson, chief analyst at Jackdaw Research told Gadgets 360.
"The big challenge with Echo will be language support, since it's basically only worked in English so far, and they’ll need to localize for Indian pronunciations and idioms (not to mention other local languages eventually too)."
Amazon began hiring people in India for Alexa and Echo device late last year, according to job postings on the website. Furthermore, it has been offering developers several incentives such as free t-shirts and other goodies to write Alexa-enabled skills. India is the only market where Amazon hasn't launched the Echo Dot but it is still running the contest.
In the meanwhile, Google Home, the smart speaker from the Android-maker has been unofficially available in India for a while via Amazon India and other sources. A Google spokesperson told Gadgets 360 last month that the device wasn't officially available in the country. The Echo Dot is available too, in that sense, from eBay India, where it can be purchased for about Rs. 3,000.