Earlier this week Alphabet Inc’s (NASDAQ:GOOG, NASDAQ:GOOGL) Google suddenly removed YouTube streaming video service from Amazon.com, Inc.’s (NASDAQ:AMZN) Echo Show smart speaker. The reasoning behind the move was never made completely clear, but now we appear to have a smoking gun. Reports emerged yesterday that Google is preparing to launch a new Google Home smart speaker with an integrated video screen. Code-named Manhattan, it would take on the Echo Show directly.
Spilling of the beans on the Google’s Echo Show killer progressed rapidly yesterday evening.
It started with a pair of e-mailed tips to 9To5Google, claiming that Google had yanked YouTube access from Amazon’s Echo Show because the company is preparing to launch a similar device itself.
New Google Home “Manhattan” Smart Speaker
Here’s the text of the first e-mail sent to 9to5Google:
“Google pulled YT from Echo Show because it will launch a similar device codenamed Manhattan. Same screen size as Echo Show. Manhattan will have YT, Google Assistant, Google Photos, Netflix, video calling. It will control Nest and other smart home devices.”
Within two hours, TechCrunch was also carrying the news, citing multiple sources. The new Google Home “Manhattan” will apparently have the same 7-inch display size as Amazon’s Echo Show and basically offer the same key functionality, including video calling. Of course Google’s version will have YouTube, where the Echo Show has lost that capability — at least for the moment. And an interesting addition that shows up from both websites’ sources is the addition of Netflix, Inc. (NASDAQ:NFLX) video.
That’s a good idea, especially since there’s no way Google’s smart speaker is going to get an Amazon Video app after the YouTube incident.
The Smart Speaker Race Takes a Video Turn
One of the interesting developments in the smart speaker race is how quickly it seems to have progressed from speakers that primarily play music and respond to voice commands, to ones that also incorporate a video screen and camera.
It wasn’t that long ago that people were freaking out about Microsoft Corporation’s (NASDAQ:MSFT) Kinect sensor being always on. Now Amazon has the Echo Look — a smart speaker that’s meant to sit in the bedroom with a camera that captures your choice of outfit. The Echo Show is built around a display and camera combo that is designed for video calling. And the new Echo Spot is a tiny smart speaker/alarm clock with a 2-inch display and built-in camera.
Apple Inc. (NASDAQ:AAPL) is coming after Amazon with the HomePod smart speaker in December. But at this point, it almost feels as though Apple may be arriving too late to the game.
The real action is rapidly shifting to video. Consumers appear more accepting of the technology now, and the small screen that can play video is showing potential to become a TV for the kitchen or bedroom.
In many cases, it’s also more convenient than picking up a smartphone or tablet. Amazon now has three smart speakers with video cameras (two of which also have displays), Google apparently has its Manhattan smart speaker with camera and video screen, and Facebook Inc (NASDAQ:FB) has also been rumored to be working on a smart speaker with a touchscreen.
Manhattan Is a Logical Move for GOOGL
The Echo Show made sense for Amazon. It gave consumers a way to visually browse amazon.com products and watch Amazon Prime videos.
Manhattan may make even more sense for Google. GOOGL stock is highly dependent on ad revenue. Adding a display to a smart speaker that plays YouTube videos is a good way to keep that source of ad revenue flowing. A display and integration with Google’s Nest smart home products makes interacting with devices like the Nest Cam much stickier, giving Google more leverage to promote Nest gear.
Naturally, a video-enabled smart speaker would allow Google to push its suite of services ranging from Google Maps to Google Duo video chat to Google Assistant — and of course, ad-revenue golden goose Google Search.
More hardware also supports the company’s push to diversify its revenue stream, so GOOGL stock isn’t so heavily dependent on that ad revenue.
Google is holding an event on Oct. 4, where its expected to show off its latest Pixel smartphones and an inexpensive new Google Home speaker to take on the Amazon Echo Dot. Will the company also take the wraps off its Echo Show Killer? The timing of yanking YouTube from the Echo Show this week is certainly suspicious. The Manhattan leakers claim Google was targeting a 2018 release, but it is rushing to get it ready for this year given the popularity of Amazon’s Echo Show and the new Echo Spot, so an Oct. 4 reveal is a possibility.
We’ll find out whether Google’s Manhattan is a go, or will remain a rumor until 2018 in a just a few days.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.