Today's mobile operating system landscape largely reflects the same kind of duopoly that long dominated desktops with Android replacing Windows. However, the interplay among hardware, software, content and services has made for a far more complex theater that seems destined to embroil the most far-flung of its participants, Amazon and Google.
The pair compete (with Microsoft and each other) in the cloud services market and offer rival digital agents in Alexa and Google Assistant embedded in competing homegrown smart speakers. They compete in a host of consumer services ranging from express home goods delivery to music subscription services. And Amazon has long snubbed Google by being the only major Android tablet maker outside of China to not offer Google Play and Google's services. This has essentially reduced Amazon's tablets to video and game consumption devices and weakened the market appeal of Amazon's ill-fated Fire phone, a blow that has kept it out of the smartphone market beyond serving ads on other handsets.
The tension between Big Shopping and Big Search has boiled over in the past month. In the aftermath of Amazon blocking sales of Apple's and Google's smart TV products (but not independent rival Roku) that competed with its own Amazon's Fire TV product, Google refused to allow YouTube content on Amazon's Echo Show, wielding the massive video repository as a cudgel the same way it did against Microsoft's mobile Windows platform.
However, there are signs that Amazon may be softening, and to its benefit. It has begun selling smart TV hardware from Google and Apple, with the latest 4K-capable version of Apple TV selling out within hours and the new Amazon Prime app for Apple TV becoming the most downloaded ever despite widespread lamentations of its lack of polish. Now, statements from Google indicate that the companies are working toward further reconciliation. Indeed, even before the Echo Show-down, rumors had swirled that Amazon might return to the smartphone market with Google Play-enabled devices.
What's driving the change of heart? In the tablet and especially smartphone markets, Amazon was a trailing adopter of Android. While its game studios brought forth a couple of exclusive titles, the Fire tablet has represented a tiny fraction of Google Play-enabled devices. But in post-smartphone speech-driven categories, Amazon has been a pioneer. It has adroitly expanded out the functionality of its core devices into video and games while moving aggressively to embed Alexa into products that aren't a good (yet) fit for the company, such as cars. This is clearly a bet the company intends to ride.
While it might seem paradoxical that a market leader would somehow be more vulnerable than an also-ran, the voice agent space is still young. Amazon must do all it can to protect and cement that leadership as the market grows, even if that means accommodating its most formidable competitor in that space. Of course, it doesn't hurt that the easing of freeze-outs by both players helps the customers and the shorter term interests of both companies, which will continue to generate goodwill far into the future.
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