Google boosts Home's monetization potential (GOOGL, GOOG)

US Smart Home Device Ownership

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The Google Home will soon have a free hands-free personalized calling feature that allows users to call both phone numbers and other Google Home devices, thanks to a new software update the company will issue for all devices in the US and Canada over the next week.

In practice, this means users can say "OK, Google, call my dad," or "OK, Google, call the nearest dry cleaner," and the device will oblige. It's worth noting that we first learned that Google was considering such a feature for its devices when the Wall Street Journal reported in February that the feature could be added to the devices.

The new feature could benefit the Google Home on two fronts:

It could bolster the device's monetization potential. While most people tend to see smart speakers as novelty gadgets, the ability to place calls could be the kind of must-have feature that will win over new users. And if users find the device more essential, Google will be able to collect more user data — and serve more ads if it eventually chooses to.
And it could help it improve its competitive positioning. Amazon currently dominates the smart speaker market — as of April 2017, about 9 million of its Echo products were in US households, while only 2% of US consumers own a Google Home. But the calling feature could be a personalized enough feature persuade consumers who don't currently own a smart speaker but want to buy one in the future to opt for the Google Home over an Echo, allowing Google to eat into Amazon's massive market share. And while the Echo products also now have a calling feature, it doesn't offer nearly as personalized features, and only allows users to call other Echo devices, not phones.

BI Intelligence, Business Insider's premium research service, has compiled a detailed report on the US smart home market that:

Analyzes current consumer demand for smart home devices based off results from BI Intelligence's proprietary survey.
Forecasts future growth in the number of smart home devices installed in American homes.
Analyzes the factors influencing the proliferation of voice control devices in the homes.
Identifies and analyzes the market strategies of various companies that have integrated voice control into their smart home ecosystems.

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