[Newsmaker] Naver, Kakao compete to secure more AI speaker purchases

South Korea’s two biggest IT companies are ramping up efforts to achieve more preorders for their artificial intelligence-powered smart speakers that are slated to hit shelves here soon, with aims to dominate the nascent market.

Naver, the operator of Korea’s biggest portal website, and Kakao, which runs the country’s most widely used mobile messenger KakaoTalk, are slated to launch voice-activated standalone speakers here in the coming months.

Globally, the smart speaker market is dominated by forerunning devices, most notably Amazon Echo powered by the firm’s AI voice assistant platform Alexa, and Google Home, which runs on the Google Assistant platform.

Equipped with speech recognition and natural language processing abilities, they are able to respond to a user’s questions and call up information on a real time basis, but do not yet provide services in the Korean language.

Targeting this gap, Korea’s IT giants have set out to develop localized, Korean-language smart speakers by leveraging the user data they have accumulated by operating internet and mobile services used by the public here.

Naver and Kakao have announced major promotions to encourage more people to buy their smart speakers, as a bigger user base means access to a wider pool of real-life user data critical to optimizing the devices and keeping them competitive.

Moreover, the device that becomes mainstream is likely to dominate the broader AI speaker ecosystem, set to soon extend beyond its current functions, which are now limited to tasks like streaming music, managing calendars and searching for information on the web.

Naver is currently offering its smart speaker Wave, equipped with its self-developed AI platform Clova, at a 73 percent discount to a limited number of customers who sign up for a one-year unlimited music streaming package on Naver Music.

It is selling 4,000 units of the Wave speaker at 40,000 won ($36), which is 73 percent cheaper than its original price of 150,000 won, to those who sign up for the 90,000 won unlimited music streaming package.

It had previously held a similar promotional event in which it gave away the smart speaker for free to customers who purchased the one-year streaming deal, on a first-come first-served basis.

Meanwhile, Kakao will start accepting preorders for its smart speaker Kakao Mini, powered by the firm’s AI platform Kakao I, from Monday. For preorders, the device costs 59,000 won, which is 50 percent cheaper than its original price of 119,000 won.

Those who preorder the Kakao Mini are also offered a one-year unlimited music streaming package on MelOn as well as a Kakao Friends character accessory to decorate the voice-activated smart speaker, according to Kakao.

Kakao is slated to begin selling the Kakao Mini by the end of October. Naver has yet to reveal the official launch date for its Wave speaker in Korea.

By Sohn Ji-young (jys@heraldcorp.com)