Amazon Offers 90% Discount on Echo Dot Smart Speakers for New Prime Student Customers

Google Home Mini has been in the news lately for a number of device giveaways such as new Pixel 3A buyers, Spotify family plan enrollees, and 20,000 attendees of an NBA playoff game. We noted in the NBA giveaway coverage that some people have suggested the value of enlisting new users to your voice assistant with the prospect of them becoming loyal customers is so high that the companies should give them away. Google is doing this with great frequency whereas Amazon has relied more on discounts and bundling with other smart home products such as Ring Doorbells.

The $4.99 Echo Dot

The latest, and most aggressive, discount by Amazon to date is offering Echo Dot smart speakers for just $4.99 to new Prime Student customers. That is a 90% discount off of the $49.99 list price and well below the regular discount prices which are typically in the range of $25-$30. Previous analyses show that the material costs of Echo Dots may be as high as $31. These costs have likely fallen as the volume of device sales has risen, but no one will argue that the material costs are below five dollars and that doesn’t account for shipping, storage, handling, marketing, and development costs.

Exposing Young Consumers to Alexa

Amazon is subsidizing the Echo Dot giveaway as an incentive for prospective Prime Student customers, but also as a way to drive more distribution of Alexa-enabled smart speakers to young consumers that may not today have loyalty to any specific voice assistant. Students typically have smartphones and those with Android-based devices are likely to be exposed to Google Assistant while iPhone users will be familiar with Siri. Amazon must find another way to introduce Alexa and smart speakers are its primary vehicle.

In addition to spending a lot of time on their phones, students also need to buy things and is among the most popular options. This promotion could also lead to more students becoming accustomed to voice ordering beyond simply checking the weather and listening to music. And, the promotion also could benefit Amazon Music Unlimited subscription trials.

So, Amazon has a lot of reasons to introduce students to Alexa at a time when they are forming habits and loyalties. Students, in turn, benefit from having a voice-enabled device for well below market cost. I am surprised this is a limited time offer and would expect to see it arrive again as students return to school. To take advantage of the offer, students must provide “proof of enrollment in a US college,” and sign up for Prime Student by the end of the day on May 24, 2019. They then must purchase the Echo Dot by June 7, 2019, to claim the discount.

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