For Amazon, Alexa has one huge flaw
Unlike rivals Siri and Google Assistant, Alexa’s stuck at home
Alexa is a homebody, which means it’s missing out on half the party.
Despite Amazon’s push to spread its voice-oriented digital assistant to everything from light bulbs to Fords to Fitbits, Alexa’s dominance remains inside the company’s hit Echo speakers — and their berth, plugged in at home.
That’s a mobility gap with rivals Siri, the most-used digital assistant by virtue of its presence on the best-selling iPhone, and Google Assistant on Android and iPhone.
These put Amazon in an awkward position: cede the untethered, outside world to rivals, attempt another shot at mobile phones — a market where it has had a rare, glaring fumble — or attempt a third way that relies on a bevy of partnerships.
“The biggest weakness Alexa has today is that it’s basically stuck at home,” says Jan Dawson, an analyst with Jackdaw Research.
“The big question is whether people are willing to use several different assistants based on location — Alexa at home, Siri or Google while out and about — or whether they’ll eventually settle on one which they can use everywhere?”
Alexa can already “travel” with you via the company’s portable Amazon Tap speaker or through one of Amazon’s budget-oriented Fire tablets. And yes, Alexa has taken residence on a couple of smartphones, including handsfree on the recently launched HTC U11. For that matter, you can install Alexa on an iPhone or Android smartphone and now have Alexa control the Amazon Music app on those devices.
Still, Alexa plays second fiddle to Siri and the Google Assistant on the devices more than 2 billion people start and end each day with — their phones.
KINDLES TO FIRE PHONE
Amazon has had a mixed track record when it comes to its own branded electronics hardware. Its Kindle eBook readers are the market leader by a mile, though the overall category is in decline. Amazon says its tablets sell well but they’re cheap to buy and presumably carry small margins.
The big bust: the Fire Phone Amazon unveiled in June 2014, several months before the Echo was introduced. A year later, Amazon was pulling the plug on the phone, a victim of a too-high price and trouble running popular apps.
Then, the Echo emerged as a surprise hit, sparking a market for connected Internet speakers that now includes the rival Google Home product, as well as Apple’s soon-to-be released HomePod speaker. EMarketer says Amazon controls about 70% of that voice-enabled speaker market.
Still, the original Echo seems primed for a refresh, especially as the competition is making a big push.
Apple’s HomePod promises superior audio when it arrives later this year, as does a Sonos speaker with Alexa that is expected to launch next week. Google has its own press event next week, where it is rumored to be bringing out a lower-priced Google Home to compete against Amazon’s popular $49.99 Echo Dot speakers. (The full-size Echo is currently at $179.99, though Amazon sometimes discounts the speakers.)
For its part, Amazon recently brought out the $229.99 Echo Show, a device with better sound than the original Echo. But the main pitch behind the product was not so much for audio but as the first Echo speaker with a built-in display.
NO NEW PHONE
So could a phone be next?
No, says Creative Strategies analyst Carolina Milanesi, and that will be just fine. “To some extent I think the flop of the Fire phone was the best thing that happened to Alexa,” she says. “Not having the phone and not having the screen in the pocket made (Amazon) think about voice first.”
Amazon has never looked to devices as huge profit makers per se, but rather as easy consumer gateways into the company’s ecommerce juggernaut. That’s a big difference with a company such as Apple, where hardware is still its core business.
“It’s so tempting to see everyone’s hardware efforts as basically the same, but these companies have very different business models,” Dawson says. “For Amazon, hardware is a means to an end, a way to get people into its ecosystem, getting value out of Prime, and ultimately spending lots of money buying things on Amazon.com.”
WHAT NEXT?
One area Amazon is banking on with Alexa is as an emerging platform for the Internet of Things and smart home, where it faces stiff competition from Apple, Google, Microsoft and Samsung. In July, for example, Amazon struck a deal with Sears to sell Alexa-capable Kenwood-branded appliances on Amazon.
Amazon has also made clear it wants to work closely with its rivals when it comes to digital assistants, perhaps signaling it won’t try to dominate every space a Siri or Google Assistant occupies. For instance, Amazon’s Alexa and Microsoft’s Cortana can “talk” to each other, both companies announced.
Where does Alexa go next? An intriguing possibility is in wearables. The Financial Times reported recently that Amazon is working on Alexa-capable smart glasses with a bone-conduction audio system that would allow a person wearing the glasses to hear Alexa without headphones in their ears.