Amazon is invading your home, although not with its cardboard shipping boxes and books.
The e-commerce giant expanded its line of connected home devices on Thursday including a smaller version of its voice-controlled Echo that comes with a virtual assistant that can answer questions, turn on lights, and order items like diapers. The company also debuted a wireless speaker that allows you to play music from your phone and more.
Similar to the Amazon Echo, Echo Dot is a Wi-Fi-connected, voice-activated personal assistant. The biggest difference with the new model is its small size—it's about as big as a hockey puck versus a 9.25-inch tall cylinder for the Echo—and that it comes with only a tiny speaker. Instead, users who want high quality sound must connect the device wirelessly to third-party speakers through Bluetooth or through a cord. The device also costs considerably less than the Echo, at $89.99 compared to its older sibling, which costs $179.99.
Using the Echo Dot requires downloading an app. To get the device to respond to commands, users merely need to say the word "Alexa," the name of its virtual assistant.
Similar to Echo, Echo Dot can answer questions, read the news, give sports scores, order things from Amazon and set an alarm clock. They can also use the device to order rides from Uber and pizza from Dominos.
Echo Dot's built-in speaker is puny and akin to that of a mobile phone. Amazon recommends that users connect it to a high quality speaker if they want to play music.
Users can stream music from Amazon's own music service, Amazon Prime Music, or through a variety of apps that are integrated with Echo like iHeartRadio, Pandora, and Spotify. Echo Dot is powered by the same voice technology as Echo, which means it can hear you from across the room even if music is playing.
David Limp, Amazon's senior vice president of devices, explained that the Dot is for people who want to use their own speaker like a Bose or Jambox. Amazon also sees the Echo Dot as serving as a secondary Echo device for different rooms, relieving people of having to return to the kitchen, for example, to interact with Alexa.
Amazon said that Dot will be available for pre-order starting on Thursday for members of its $99 per year Prime subscription service.
Amazon is now entering the already crowded wireless Bluetooth speaker market that is filled with established competitors. In fact, many of these competitors sell their speakers on Amazon's e-commerce site.
Amazon Tap costs $129.99, and can be connected to Wi-Fi through the Amazon Alexa mobile app. The device also connects through Bluetooth so you can stream music from your phone or tablet.
The device itself is a six inch cylinder that provides nine hours of audio when fully charged. Tap can be recharged through a charger and cable that comes with it, as well as through a dock. Similar to other Bluetooth enabled speakers, users can stream music from Spotify, Pandora, and a number of other music apps from a phone or tablet.
For more on Alexa, watch this:
In addition to playing music, Tap can be used as a pared down version Echo by pressing the speaker button on the device to talk to Alexa. Users must be close to the device to activate these services.
Amazon sees the Tap as being a smarter music speaker than existing options available from other companies, Limp explained. The big differentiator, he said, is Alexa's assistant services and that the speaker is more than just a conduit for playing music. But despite this, Amazon has a formidable challenge competing with established players. The connected speaker market is already populated Jawbone's Jambox, Apple's Beats and the JBL Extreme.
The big picture
As my fellow Fortune colleague Stacey Higginbotham wrote in her review of Echo nearly a year ago, Amazon's ambitions are much broader than becoming a consumer electronics giant. Yes, it wants to use Echo to increase its e-commerce business by giving users yet another way to buy songs and re-order products.
But Amazon also wants to push into voice recognition. "We believe the next big platform is going to be voice," Limp said to a group of reporters earlier this week. Of course, Apple and Google are also moving in the same direction with their versions of Alexa built into their products.
But Limp explained that through Echo, and other devices, Alexa becomes a service for taking action. Because Echo is in the home, and can manage other products, it can collect more data about user behavior that can help Amazon recommend what those users should buy.
That idea goes back to Amazon's core strategy, which is to create a more personalized e-commerce business that recommends items based on what customers have bought previously.
What's unclear is just how popular Echo is, and whether it has mass appeal with consumers both in and outside the U.S. Amazon does not disclose sales numbers, but the company said in December that the Echo was its best selling product over $100 on Black Friday.
Limp said that Amazon has been surprised by Echo's popularity, which would contrast sharply with some of Amazon's other devices like its Fire phone. That device flopped after it was debuted in June 2014, and forced the company to write down $170 million.
"Consumer electronics are hard," Limp said. "Whenever we have a hit, we are surprised."