Google’s Pixel Buds, Bragi, and the power of incumbents

Google introduced a range of new products during its hardware event including a set of wireless headphones called the Pixel Buds.

Google Pixel Buds (Source)

Google Hardware event; presentation of Pixel Buds start at 1:23

Amongst other features, Pixel Buds support real-time voice translation through Google Translate. The earphones, however, do not do the actual translation work:

Google told us that the earbuds are connected via Bluetooth to the smartphone, and that the smartphone microphone picks up the spoken words. It sends them over the cloud to Google’s data centers, where Google Translate produces a translation. It sends back the translated words in the form of speech to the phone, which transfers them back to the earbuds. — VentureBeat

Thus, they are more about seamless user experience than technology (click the Bud and start talking vs. talking out your phone, opening the app and then talking).

The announcement of wireless headphones should not come as a surprise. A Google patent from earlier this year showed that they might be working on something like that. Also, Samsung, Sony, Motorola, and Apple have similar products as well. Speaking of Apple, Apple’s AirPods are what comes immediately to mind when hearing about the Pixel Buds. And the comparison makes perfect sense. However, a range of startups manufacturing wireless headphones with real-time translation should also come to mine.

Google’s Pixel Buds and Bragi

Among these startups, there is Bragi, Waverly Labs, and MyManu. As I tend to focus on German startups, let’s look at Pixel Buds alongside Bragi. Bragi is a Munich-based start-up manufacturing and selling hearables (“smart headphones“ ) [1]. Bragi was founded in 2013 and raised more than USD 3.3 million on Kickstarter in 2014 for their first product the “The Dash”, making it the then most funded European crowdfunding campaign. (In total they have raised $25.39M). Since the crowdfunding, Bragi has added a „normal“ version of their smart headphone, and in the course of their “#BragiNYC Announcement“ in May 2017 they announced the The Dash Pro and The Dash Pro Tailored by Starkey® [2]. Recently they announced Alexa-integration into The Dash and The Dash Pro [3]. Considering that both headphones already support Siri, Cortana, and Google Assistant this integration makes them very powerful. Furthermore, The Dash Pro comes, amongst others, with an iTranslate integration allowing live voice-translation between 40 languages.

With all that in mind, it should be surprising how little attention Bragi received in the course of Google’s announcement. However, considering The Dash Pro’s €349 price (plus $4.99 a month for iTranslate Pro which you need for the live voice-translation[5]), it becomes clear why they received so little attention. Like in the case of Google, Bragi’s translation feature needs some clarification. As Sean O’Kane from The Verge says: the difference between the Dash Pro and “any other wireless earbud“ is “that the Dash Pro is treated like a trusted device in the iTranslate app“. As he goes on to explain, it would be „silly“ of iTranslate not to add more products into the mix. And in fact, they did launch a similar product, called iTranslate Converse. Whereas with Bragi’s headphones you use the headphones and the person you are talking to your phone for input and output, with the iTranslate Converse app both people use your phone.

Going back to the comparison between Google’s Pixel Buds and Bragi’s headphones, the question is whether Bragi can successfully compete against Google or Apple in that market?

Bragi’s position amongst incumbents

Before answering that it merits to consider how Apple, Google, Bragi, Bose, Fitbit, and Beats position their earphones (one of the most popular brands). Most other earphones are very undifferentiated; for the average consumer, there is no big difference whether they buy ones from AKG, Sennheiser, Sony, or Panasonic. With the companies mentioned above it is different as — besides Bragi — each occupies a very clear spot in consumers’ heads:

  1. Bose’s headphones are bought for their noise cancellation
  2. Pixel Buds are bought for their live voice translation
  3. Beats are bought for their brand
  4. Apple AirPods are bought because they work seamlessly with all Apple devices and because of their brand
  5. Bragi’s The Headphone are bought because they are wireless
  6. Bragi’s The Dash Pro are you bought because of their noise cancellation, voice translation and exercise capabilities (waterproof and integrated storage and sensor)
  7. Fitbit’s Flyer are bought because of their fitness capabilities and compatibility with Fitbit’s smartwatch

Bragi’s The Dash Pro differentiated but not market fit

This positioning rises the question why people would Bragi’s headphones. In regards to The Dash Pro, it is neither voice translation nor noise cancellation.

The Pixel Buds are compatible only with Google’s Pixel. Thus, if somebody is looking for live voice translation and does not own a Pixel, Bragi’s The Dash Pro might be the right choice. However, there are not enough people for whom life voice translation is a purchase criterion. There are some “extreme travelers” for whom that is useful but even here there will be no mass market adoption due to its currently imperfect functionality. And even if it worked perfectly, it is similar to buying a camera smartphone like the Samsung Galaxy K zoom (a Samsung smartphone with an optical camera lense built in); in nine out of ten times the normal solution is good enough and the 1oth time does not merit its purchase.

The Galaxy K zoom (Source)

In the case of the Galaxy K zoom, in nine of ten times the camera of a “normal” smartphone is good enough. In the case of Google’s Pixel Buds, in nine out of ten times translation through your phone with the translation app is good enough. Further, translation through headphones is a “commodity feature” as pointed out above; it can easily be achieved with other earphones.

Furthermore, if people want noise cancellation, they will go for Bose (if Bragi’s noise cancellation feature is as good as Bose’s than this changes everything).

With this in mind, The Dash Pro’s exercise capabilities (waterproof and integrated storage and biometric sensors) is an interesting feature because headphones for exercising are very much in demand. Also, Apple has a patent for “Earbuds with biometric sensing”. Considering further how much emphasize Apple places on health and fitness and how they are pushing a smarpthone-free world with the new Apple Watch and AirPods, it makes a lot of sense to be bullish about the future of wireless fitness headphones. And Bragi is — it seems — good at it. The Dash Pro has great features and controls (waterproof, built-in storage, automatic exercise tracking, built-in coach, head gestures etc.). However, it also very costly. The question is then whether the average customer who usually pays $34 for headphones, will now pay 350€ for them. The answer is no. Psychologically speaking it is difficult to justify this price due to its contrast to what headphones cost now and that these €350 equal between 70 and 90 percent of what the two most popular smartphones (the iPhone 6s and Samsung S7 Edge) cost. Beats and Bose, who own 40% of the premium headphones market, however, show that people are willing to pay a premium for headphones. But — and this is a big but — people’s motivation behind buying Beats and Bose is clear (sound quality with Bose and brand with Beats). And even then they only have two and three products (Bose three and Beats two) costing as much or more than Bragi’s The Dash Pro.

This is not true for Bragi. Not only do they lack a recognized brand (their cooperation with Sparky could change that a bit, though), but also — as mentioned above — The Dash Pro offers features people do not need. If Bragi were to find customers who need average noise cancellation, voice translation, a Fitbit in their ear and are willing to pay 350€ for that, The Dash Pro would be very successful. But this is not the case. In each of these cases, you could pick the dedicated device (e. g. a Fitbit) and a cheaper headphone and most probably get a better experience. Thus, in theory, the Dash Pro is very differentiated, but the differentiation is based on features which the mainstream customer does not need.

The Headphone’s lacking differentiation and difficulty of differentiation with headphones

Bragi’s other earphone, The Headphone, in contrast, is not differentiated at all. On the one side, costing 169€, they are priced at a similar level as products from known (e. g. Apple’s AirPods: 179€ , Sony’s Ear: 169€, or Motorola’s VerveOnes: $79.99) and “unknown” brands. On the other hand, their whole category — truly wireless headphones or “hearables”, i. e. those headphones who have no wires at all — competes with “corded wireless” headphones, i. e. those whose earbuds are wired. In this category, there are know brands (e. g. BeatsX: $149.95 or Bose’s SoundSport wireless headphones: €179,95) and a range of “no-name headphones”. Whereas The Headphone costs as much as its competitors and can do as much as they, the issue is that these companies have a trusted brand as, for instance, shown be the market share of Beats and Bose in the U.S. Wireless Headphone Market.

The U.S. Wireless Headphone Market (Source)

Building hearables is difficult. Wareable has a good article on that, but in essence, it is about size. All the components, battery, microphone, speakers, antennas etc., must be placed into very little space. Thus, they are very expensive. And although the average selling price for headphones is rising, the above quoted $34, which is the price from 2015 following an 11 percent price growth, is still far away from three figures. In fact, I am unsure whether we will see a permanent shift where your average consumer headphones cost three figures. However, I am sure that hearables are the future but for headphones that cost three figures, a clear differentiation is essential.

It is extremely interesting, that currently companies can differentiate themselves in this category if their headphones simply work as Apple has shown with AirPods. The issue with this differentiation is, however, twofold. Firstly, it is not permanent. Other companies will make sure that their hearables work. Secondly, the relative advantage of hearables — if they are only a completely wireless version of wired headphones — is not big enough. Comparing them to the above-mentioned name and no-name “corded wireless” headphones, people will see little reason to pay a premium just to get rid off that short cable these models have. What they will do, however, is pay a premium for something unique. Bragi’s fitness tracking features on their The Dash Pro is something unique. Although Fitbit and others have shown that people do not care that much about health and that this field has competition from Fitbit Flyer, fitness trackers in general and a host of other headphones dedicated to fitness, I think that a “Fitbit in your ear” is a great differentiator in this category.

Right now, they can reach the mainstream buy making headphones that just work, due to the fact that this value proposition is not significantly better than “corded wireless” headphones or completely wired headphones, they should try to capture market share through a highly differentiated product, the above-mentioned fitness headphone. Furthermore, we must not forget that wireless headphones account for only 17% of all headphones sold and that their average selling price was $50 or below (. However, as fitness tracking is not a purchasing criterion of the mainstream, Bragi will not reach the mainstream market with that strategy. Furthermore, once hearables become the new style in headphones, “just working” is not enough. At this point, I am unsure how Bragi could establish itself among the leading headphone companies. Building a brand around almost invisible headphones is difficult, so it must be something physical. Or not. Besides buying Beats headphones, there is not much to differentiate among headphones; some people will pick them based on special features such as noise cancellation, for special use case (e. g. sports) and differentiate between form factors (in-ear, over-ear…) but the majority will go for “decent” wired headphones (in the future wireless) with a microphone and a remote for phone control. Again drawing the comparison to Beats and Google both companies have shown that you can introduce a new feature into an else commoditized product category. The question is whether Bragi can introduce a new value proposition into that market like Beats did with their headphones (high focus on branding) or Nintendo with the Wii (low-end game console with a new form of controlling it) or whether they will become of the many no-name headphones you can buy from Amazon.

Besides value-based differentiation, Bragi could also gain a foothold in by being incredibly cheap. However, I think that they cannot afford to cut prices because they still need the money for development. In this context their premium pricing strategy with The Dash Pro makes a lot of sense in theory; find a niche that is willing to pay a premium and then use that money to build a mainstream product. However, as outlined above, I do not see enough people who are willing to buy The Dash Pro.

The power of incumbents

The overall discussion of Google’s Pixel Buds vs. Bragi is similar to Amazon’s Echo Show and Nucleus. In 2016 Amazon invested $5.6 million in Nucleus a startup selling and producing an Alexa-enable intercom system with a screen. About a year later, Amazon introduced a very similar product, the Echo Show. Although the Nucleus is better than the Show (according to the founder), it is clear that Nucleus can only beat Amazon if their product is significantly better. With Bragi and Google it is similar (except that Google did not invest in Brag); Bragi, Waverly Labs and other startups, introduce voice translation, Google, the incumbent with far deeper pockets (think marketing or manufacturing) and existing customer based (Pixel phones) follow suit. Due to competition from other sides the situation is more complicated for Bragi (and Co.), but the essence is that if Bragi cannot find a way to clearly distinguish them from their incumbents they are in trouble.


[1] Somehow the term hearables is not catching on. Maybe this is because their meaning has been overhyped (including by me. I even wrote a report termed “the future of headphones” where hearables play a central role)

[2] They also announced The Patch and mentioned that they were working on AR glasses.

[3] The press release is confusing because Bragi does not sell the The Dash anymore.

[5] I could not find any information about the costs for iTranslate on Bragi’s website. But iTranslate’s website confirms it.

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