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Germany Gets its Own Smart Speaker with Deutsche Telekom Magenta

One year after Deutsche Telekom told Reuters it would launch its own smart speaker but needed real world testing first, Magenta was finally made available for purchase on Friday. The product launch is also six months after Orange launched in France its Magenta twin called Djingo. The two European telecom giants collaborated on building voice assistants designed for Europe in general and France and Germany in particular. Both companies also collaborated with Amazon and integrated Alexa into their smart speakers to work alongside the native Djingo and Magenta assistants.

The launch announcement was made at the annual IFA electronics exhibition in Berlin on Thursday and it focused on the device’s European heritage, security, and integration with Deutsche Telekom services. Michael Hagspihl, Head of Consumers at Deustsche Telekom commented:

“With the sales launch of the Smart Speaker, Deutsche Telekom is taking its first big step into a new voice control ecosystem. In recent months, we have intensively trained our Smart Speaker with our customers and continuously improved our voice assistant. We are pleased that the first Smart Speaker from Europe is now available for our customers.”

Buy or Rent Your Smart Speaker

The Magenta smart speaker will retail for €149.99 but is on sale through October 31st for €99. This price point seems high considering that Amazon offers several alternatives including the Echo Dot for €59.99 and Echo Show 5 smart display is only €89.99. Similarly, the Google Home Mini sells for €59 and Google Home just €99. It appears the company may be positioning Magenta as an alternative to Amazon’s Echo Plus smart speaker that includes an onboard smart home hub. That device is priced at €149.99 but also includes Zigbee connectivity which Magenta’s specifications suggest is absent on Deutsche Telekom’s device.

There is an option to lease the smart speaker for €4.95 per month. It would take a consumer nearly two years to match the €99 discount price in monthly payments so that may be an attractive option. What it also means is that the price of entry for a smart speaker can be very low and buried inside your telecom bill each month. This is similar to how many telecom providers are now promoting smartphone leases over outright device purchases.

If you are leasing your smartphone from a telecom provider you may be less likely to switch when the time comes for an upgrade because the upfront cost is lower. Leasing smart home devices would tie users even more tightly to a specific provider and raise switching costs for consumers. This seems like a strategy Amazon could manage easily, but with price points so low for the entry-level devices it may not be a significant barrier to adoption.

Differentiated Features

Magenta does have some features that Alexa and Google Assistant lack. These are related to other “Deutsche Telekom offerings such as MagentaTV, Magenta SmartHome, and telephone services,” according to the announcement. The devices enable telephone calls directly to other devices and offer navigation and control of television programming. For consumers that have adopted a wide array of Deutsche Telekom services, the deeper feature integration into these services than you can get from Alexa and Google Assistant may be attractive.

Alexa On Board Means More Features

It is also notable that there are now three prominent smart speakers that have a native assistant from the device maker and also run Alexa to offer additional capabilities. In addition to Magenta, both Orange and Facebook have partnered with Amazon to supplement their device features. This is necessary because the devices otherwise would fall short of consumer expectations.

Alexa has 60,000 integrations with third-party devices and Google Assistant 30,000. New smart speakers have zero or a handful of integrations at best. Amazon and Google have set consumer expectations that smart speakers can support smart home and other devices so this could be a feature gap for new devices coming to market. A simple solution is to integrate Alexa alongside the embedded assistant and its integrations and broad feature sets are instantly available. As a result, these companies can say their devices can do everything the leading smart speakers can do and more.

It is true that Deutsche Telekom announced several new partnerships for its Magenta smart home solution this past week and has an intent to expand those direct connections. However, it is also clear that even technology giants such as Apple and Microsoft have struggled to amass more than a few hundred device integrations so using Alexa as a conduit for many of these connections appears to be a good strategy.

You may note that Google Assistant is not commonly offered alongside other voice assistants. In fact, Sonos which wants to offer both Alexa and Google Assistant access simultaneously was told by Google they would not allow it. The result is that Sonos users can choose Alexa or Google Assistant in their setup, but not both. Google Assistant is offered alongside Telefonica’s Aura assistant in the Movistar Home smart display. And, an announcement last week suggests GM will provide Google Assistant access alongside its own voice assistant in new cars. So, it appears Google may be willing to do this but Facebook, Orange, and Deutsche Telekom all chose Alexa instead.

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