Microsoft Cortana to Get a Home In New HP Devices, Competition Heats Up

Microsoft today revealed more about its Cortana voice assistant strategy at the Build annual developer conference. This included a demo of the well publicized Harman Kardon Invoke smart speaker that won’t ship until late 2017. New details that Intel will supply a chip reference designs for devices and HP plans to build a device also emerged. Engadget is covering the conference live and had this to say about Microsoft’s device strategy:

A key piece of Microsoft’s Cortana strategy is Echo-like hardware, but it hasn’t revealed its own device (yet). Instead, the first Echo-like device is from a third-party supplier, Harman Kardon, with the Invoke. At the Build conference today, HP also said it would build Cortana-specific devices, and Intel revealed that it would develop reference designs for the AI assistant.

Microsoft Needs an Inexpensive Home Based Device for Cortana

These are important developments. Voicebot was the first to report that Microsoft already claims over 140 million monthly active Cortana users. Microsoft CEO Satya Nadella confirmed that number in his address at the build conference today.

However, nearly all of those users are accessing Cortana through Windows and Microsoft Office. Microsoft wants to have a presence throughout a person’s day and not just for business productivity. That means it needs presence in consumer devices in the home and on smartphones. The Invoke is a good step, but few people believe that Harman Kardon, known as a premium brand, will sell a mass market device that can compete with the $50 Amazon Echo Dot. A device that costs over $200 may make it into one room of the home, but is unlikely to be in every room. That is the genius of the Echo Dot. It is so inexpensive that people can put them everywhere.

Enlisting HP as a device partner might fill in that mass market product gap. With that said, intentions to deliver a product doesn’t mean it will be here soon. The Invoke has been in process for many months and probably more than a year and still won’t ship for another 4-5 months. I’d be surprised if we see a Cortana-enabled HP device in 2017.

Competition Heats Up

Amazon pressed its current advantage by announcing the Echo Show yesterday and by adding a voice calling and messaging feature. The Echo Show will be the first product to integrate full voice assistant capabilities with a touchscreen providing multi-media interaction. It will ship in June. Microsoft has also been promoting Skype integration for voice calling through the forthcoming Invoke as a key product differentiator. Amazon pre-empted that yesterday by making the feature available to all Echo users. The Seattle rival isn’t going to make this easy on Microsoft.

This market is moving quickly, but it is still early. Gartner estimates that 75% of US households will have a smart speaker with a voice assistant in 2020 and Edison Research data shows that only 7% have a device today. That means 90% of the market is still up for grabs. Amazon has a lead and is pressing its advantage, but players like Microsoft and Apple still have a big opportunity to make a mark. eMarketer estimates that they will only fight over 6% of the market as Amazon and Google snap up large market share, but many things can and do happen in emerging technology markets, especially when consumer choice is involved.

It’s About Productivity, But You Still Need Access to the Home

Where Microsoft has a big advantage is in business productivity given its one billion Microsoft Office users. The company stressed that angle in several Build presentations today. If Cortana takes off, it could cement the dominance of Microsoft Office for another decade. However, it still needs a presence in the home to round out the value proposition for today’s professionals that are always accessible. Harman Kardon won’t be enough. May HP and other Intel partners will make the difference and Microsoft will then have another consumer play to complement Xbox.

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