Alphabet Inc’s (NASDAQ:GOOGL) $399 Google Home Max is now available online and in stores, just in time for Christmas. Apple Inc. (NASDAQ:AAPL) may have missed the holiday sales boat with its premium HomePod smart speaker, but Google isn’t making the same mistake.
The Google Home Max joins the Google Home and Google Home Mini to take on the mighty Amazon Echo.
It’s a battle for market share, but smart speaker sales are also an important move toward boosting hardware’s profile at Alphabet and helping to reduce GOOGL stock’s dependence on ad revenue.
Google Home Max
First announced at October’s Google event, the Google Home Max is an effort to spark smart speaker sales to audiophiles and consumers with deeper pockets.
Previously in these devices, audio has been an afterthought. Amazon.com, Inc. (NASDAQ:AMZN) designed Amazon Echo — the original smart speaker — as a Trojan Horse to slip Alexa into homes. It played music, but compared to a similarly priced Bluetooth speaker, it sounded pretty anemic.
Since Alexa, there’s been a push to boost smart speaker sales and market share by offering cheaper versions. That means sacrificing even more audio quality. The Echo Dot and Google Home Mini are almost impulse buys at this point, but lack when it comes to actually playing music.
The Google Home Max is an attempt to get music loving consumers to buy a smart speaker instead of a wireless speaker. It features high-excursion woofers, custom tweeters, and plenty of volume — Google says it’s 20 times more powerful than the Google Home.
The Google Home Max also uses machine learning to customize audio to match the acoustics of a room. It’s a big speaker, and it’s designed to offer a premium look as well as sound, with tasteful fabric covers.
If all this sounds familiar, it’s basically what Apple promised with the HomePod back in June. While the HomePod was originally given a December release date, Apple recently delayed the Siri-powered smart speaker until 2018.
The Google Home Max is now available in retail stores and through Google’s online store, where the Chalk (white) version shows a Dec. 18 shipping date. Charcoal (black) appears to be sold out at time of writing, at least online.
How Google Max Could Help GOOGL Stock
Alphabet’s effort with the Google Home line will be worth it.
Smart speaker sales are hot, and the market is growing. Gartner says it will be worth $3.52 billion by 2021, up from $720 million in 2016. Google is expected to take a 24% slice of the smart speaker market by the end of 2017, but that’s not the kind of revenue that would have any real impact on GOOGL stock.
However, the overall wireless audio market — not including smart speaker sales — was worth $16.13 billion in 2016, and is predicted to reach $31.8 billion by 2023. With the Google Max, Alphabet Inc is in a position to challenge traditional wireless speaker makers.
The high-performance audio makes it a contender to also scoop up some of that much more lucrative market. This is not the demographic that’s likely to buy an Amazon Echo primarily to listen to streaming music or connect to a turntable, but they might be tempted by the audio quality of the Google Home Max.
At $399 compared to $49 for a Google Home Mini, the Google Home Max has a considerably bigger potential hardware revenue impact if the company can crack that audiophile market.
A head start on Apple’s HomePod — including the holiday sales season without its primary challenger — is not going to hurt the situation.
The more Google Home smart speakers end up in living rooms and kitchens, the more the owners are likely to use Google services, so the Google Home Max could be a win in hardware revenue and a win in helping keep the ad revenue flowing.
For GOOGL stock, the release of the Google Home Max is good news.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.