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23 September 2019

Deutsche Telekom belatedly joins the smart speaker race

It has been a long time coming, but Deutsche Telekom has finally launched its Smart Speaker. Billing it as the first European smart speaker, the operator will be offering it for €150, or a lease of €5 per month. Integrated into its smart home and media offerings, the speaker is joining a very competitive market, and will test the appeal of the joined-up experience over the off-the-shelf approach.

The purchase price is a bit steep these days, although the launch promotion of €100 is more reasonable, compared to the likes of Amazon’s Echo family and Google’s Nest line-up. However, it is being billed as having “sumptuous sound quality,” and so it is not really fair to compare it to the cheapest of these rivals. We await reviews to confirm whether it lives up to its own hype on this front.

At the rental price, it will take 2.5 years to reach the upfront purchase price, which isn’t bad at all really. This approach could allow many customers to experiment with the devices to see how they like them, as it removes the burden of having to buy the whole thing only to find out it doesn’t fit your lifestyle or environment.

The rental approach also lets consumers think of the device as a service, rather than a physical product, slotting in with the other TV and broadband packages that DT might sell them. To this end, there’s a clear expansion opportunity for DT to pursue, in terms of renting more equipment to customers in SHaaS packages.

But the launch material seems more focused on how the device enables customers to use the voice assistant as a remote control for the media offerings. The announcement does mention controlling the Magenta SmartHome ecosystem (who remembers Qivicon?), but searching for TV shows, listening to Spotify, and making phone calls are somewhat more front and center.

However, something that is far more notable is also rather low down in the billing. The Smart Speaker will support Amazon Alexa as a “second voice service,” which does not bode well for the AI platform that Orange and DT have been jointly developing for their own devices. Orange launched its Djingo device about six months ago, in France, which also has the Alexa tie-in.

It is very hard to see the Djingo ecosystem flourishing when customers can simply access the Alexa environment that is so full of third-party integrations. Replicating the richness of that platform would be an immense project for DT, and so the DT-branded voice element seems doomed to only a limited amount of usage.

However, Orange and DT could really play up the privacy angle, as an appeal to customers to remain in their ecosystem and not stray into Amazon’s. The announcement makes mention of the “secure processing of customer data in the EU by European companies is becoming ever more important, and this is becoming an increasingly powerful sales argument,” but we are quite skeptical of the impact here on actual usage. Consumers routinely default to the cheapest or most convenient offering, despite the supposed value of privacy.

Setting up Google and Amazon as bogeymen could be the basis for a marketing campaign, but it’s not like Orange and DT have clean sheets in the whole nation state surveillance departments. The Amazon and Google counter would stress that these two firms are capable of monitoring your entire web usage, and so a mud-slinging match would presumably quickly break out – with no obvious winners.

“With the sales launch of the Smart Speaker, Deutsche Telekom is taking its first big step into a new voice control ecosystem,” explains Michael Hagspihl, Head of Consumers. “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.”

One thing that is absent from the announcement is any mention of Zigbee, Z-Wave, Bluetooth, or Thread. There does not seem to be a low-power connectivity option for smart home devices, meaning that this is not going to be taking the role of a smart home hub – presumably relying on other equipment in DT’s line up to power a smart home-as-a-service offering.