Alibaba Group Holding Limited (NYSE:BABA) is rumored to be creating a voice controlled speaker akin to Amazon.com Inc. (NASDAQ:AMZN) assistant Alexa that is featured in the Echo.
BABA stock rumors of this new device have been doing the rounds for the past few days, leading to speculations regarding the specifications of the gadget. But at a press conference in Beijing on July 5, the Chinese tech giant took the wraps off Tmall Genie X1, its new smart home assistant.
The official rollout is slated for Aug 8. For now, the device takes orders only in Chinese, which means that it won’t be hitting the U.S. market to take on Alexa and the Google Home device from Alphabet Inc. (NASDAQ:GOOGL, NASDAQ:GOOG).
AliGenie Specifications and Functions
Powered by Alibaba home grown voice assistant service AliGenie, the 12.6 cm tall device is capable of performing a range of tasks, ranging from scheduling and reminding, media streaming, fact finding to controlling other smart home devices. It allows domestic customers to order from the company’s Tmall website and make payments through Alipay, the Alibaba third-party payment system.
BABA stock details show that the device is a lookalike of Amazon Echo but is about half its size of the device from AMZN stock. It can be activated by saying “Tianmao Jingling” just as Amazon’s Echo gets activated on saying “Alexa.” It is fitted with a custom Smart Audio chip and supports a 6-beam microphone array on the top and a subwoofer at the bottom.
Like AMZN Stock, Low Price to Counter Competition
With the launch, BABA stock enters a highly competitive market in China marked by the presence of Baidu Inc. (NASDAQ:BIDU), JD.Com Inc(ADR) (NASDAQ:JD) and Tencent Holdings Ltd (OTCMKTS:TCEHY). It has kept the price of the new device considerably lower than that of its domestic rivals as well as western counterparts to gain a competitive advantage. That makes sense especially when Alibaba has made a quiet and late entry into the space.
Tmall Genie X1 will be on sale for $73 (499 yuan), significantly less than Baidu’s Xiaoyu that sells for $250 (1,699 yuan) and JD’s DingDong that sells for $118 (799 yuan). As far as its western counterparts are concerned, prices of Amazon Echo andHomePod from Apple Inc. (NASDAQ:AAPL) are a respective $180 and $349.
BABA Stock Going Beyond Core Retail
Increased competition and market saturation have forced Alibaba to move beyond hawking goods online. The company is trying to build its business as an ecosystem of retail, cloud and artificial intelligence. With its newest venture, it appears that Alibaba is banking on artificial intelligence and machine learning for much of its future growth.
Investors will surely keep an eye on how Alibaba’s efforts beyond online retail impact its share price, especially when it has appreciated a massive 82.6% over the last one year compared with the Zacks Electronic Commerce industry’s gain of 49.4%.
The ‘Follow Amazon’ Strategy
From its grocery push and blending online and offline features in retail to movies, cloud and artificial intelligence, BABA stock has been doing exactly what Amazon does in the U.S. Other Chinese technology giants are also mimicking the ways of U.S. technology leaders.
This is a clever way of utilizing the Chinese regulatory environment and further strengthening entry barriers for U.S. competitors. By having a business similar to those of their U.S. rivals, Chinese companies will enjoy the home advantage even if regulations ease in the future.
Apart from enabling customers pay through the device using Alipay, BABA stock is opening up the software powering Tmall Genie X1 to third-party developers. That makes sense because third party contracts could help it penetrate potential business areas going forward, apart from attracting more customers to its websites.
The once nascent smart home market is already a potential area of growth, thanks to Amazon and Google. Now, it remains to be seen how Alibaba could further disrupt the industry.
Currently, BABA stock is a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
