Amazon (AMZN) Bolsters Echo Portfolio With New Devices
Amazon AMZN has expanded its family of Echo devices by introducing Echo Show 8, Echo Hub and Echo Frames, which are expected to deliver customized, proactive and intuitive Alexa experiences.
Notably, the Echo Show 8 has been upgraded with a 13-megapixel camera, improved audio pipeline, faster processor and built-in smart home hub, offering minimized background noise, enhanced audio, video calls, and room adaptation technology.
Meanwhile, Echo Hub, the Alexa-enabled wall-mountable smart home control panel, boasts features like a customizable dashboard, a thin eight-inch display, and adaptive content using infrared technology to detect nearby users, enabling easy management of devices.
Further, the next-generation Echo Frames feature five styles, improved battery life and enhanced speech processing technology, allowing hands-free use of Alexa, music and smart home devices.
Additionally, Amazon partnered with Safilo, a leading eyewear manufacturer, to combine Alexa's capabilities with iconic Carrera designs, providing seamless integration into customers' daily lives.
We mark the latest move as Amazon’s effort to expand its smart home devices portfolio.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote
Growth Prospects
Apart from the latest launch, Amazon recently added four other devices to its Echo portfolio, namely Echo Pop, Show 5, Show 5 Kids and Echo Buds, to bolster its Echo lineup. These launches give customers more choices in how they access Alexa.
Further, Amazon infused generative AI into the Fire TV ecosystem, to enable voice search, personalized recommendations and personalized content search based on specific preferences.
These endeavors are likely to strengthen the company’s presence in the booming smart home devices market.
Per a Future Market Insights report, the global smart home device market is expected to reach $300 billion by 2033, witnessing a CAGR of 17.8% during the period of 2023-2033.
We believe Amazon’s growing prospects in the promising smart home devices markets will likely aid its overall financial performance. This, in turn, is expected to instill investor optimism in the stock.
For third-quarter 2023, Amazon expects net sales between $138 billion and $143 billion. Net sales are expected to grow 9-13% from the year-ago quarter’s reported figure. The Zacks Consensus Estimate for net sales is pegged at $141.89 billion, suggesting year-over-year growth of 11.6%.
Notably, AMZN’s shares have gained 54% in the year-to-date period compared with the industry’s growth of 33.2%.
Stiff Competition
We note that the expanding smart home devices portfolio will continue to aid Amazon to compete well with some notable industry players like Apple AAPL and Alphabet GOOGL, which are also making concerted efforts to gain a solid footing in the smart home market space.
Notably, Apple’s HomePod (2nd generation), a powerful smart speaker with advanced computational audio and Siri intelligence, offers immersive Spatial Audio tracks, allows users to manage tasks, create automation, and check room temperature and humidity hands-free.
Further, Apple has recently released new HomePod 17 software for HomePod and HomePod mini, enabling AirPlay sessions via Siri on iOS 17 or iPadOS 17, facilitating music streaming.
Meanwhile, Alphabet has announced that Google’s smart home controller app, Google Home, will be available to everyone, with upgraded features including a new Favorites tab, improved camera interface, support for new device types, and iPhone integration for Matter devices.
Additionally, Google has announced that users can transfer their oldest Nest smart security cameras to Google Home, provided they sign up for the preview program of the Google Home app.
Zacks Rank & Another Key Pick
Currently, Amazon sports a Zacks Rank #1 (Strong Buy).
Another top-ranked stock in the broader retail-wholesale sector is BJ’s Restaurants BJRI. BJRI currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
BJ’s Restaurants has lost 7.7% in the year-to-date period. The long-term earnings growth rate for BJRI is currently estimated at 15%.
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