Right on the heels of Prime Day last week came Amazon's second quarter earnings report, which the financial analyst types lauded as a blowout... even if it came up a bit light on expected revenues. And those numbers didn't even include the estimated $4 billion in Prime Day sales.
Speaking in terms of billions, the official earnings announcement included about a billion bullet-pointed highlights, with a number of them focused on Alexa, including:
- The Alexa Skills store now offers more than 45,000 skills created by third-party developers
- Alexa being available on even more products via the Alexa Voice Service, including Windows 10 PCs from Acer, HP, and Lenovo; and select vehicles from BMW, Ford, and Toyota.
- New ways to navigate and control video content with Alexa, including integrations with TiVo, Dish, Netflix, and DirecTV.
- The Alexa Fund invested in new companies, including Tact.ai, and kicked off the second round of the Alexa Accelerator powered by Techstars, a program empowering entrepreneurs focused on innovating voice technology.
- Amazon adding new Alexa capabilities, including calendaring features, such as the ability to move meetings via voice; new information on current events like the Royal Wedding, World Cup, and NBA Playoffs.
Believe me, these are just a few of the Alexa/Echo highlights mentioned in the release. And maybe these points were there to back up the quote from CEO Jeff Bezos included in the release:
"We want customers to be able to use Alexa wherever they are."
In fact, the only quotes in the release attributed to Bezos focus solely on Alexa. And the Alexa "wherever they are" message resonated with many people and led to speculation that maybe Amazon is going back to the drawing board to take another stab at selling its own smartphones. Then, that speculation was heightened after Jen Salke, head of Amazon Studios, recently told a reporter she was given a prototype phone that had an improved user interface for viewing Prime Video.
Later, an Amazon spokesperson walked back that statement from Salke, saying she misspoke and meant to say it was a prototype user interface on an existing cell phone model. But the phone speculation has already left the barn, and it leads to an interesting question: Even though Amazon is still the pacesetter in the voice-first device space, does it need to have its own smartphones to keep its lofty position and hold off the likes of Google, Apple, and others?
It's been pretty amazing to see the smart speaker market go from "what is it" to "how many should I get" in just over three years. And Alexa has become the poster child (or, better yet, poster voice) for the early days of the voice-first movement. But it has done so without having a smartphone that is sold with the Alexa app natively included on it. And while it's selling more Echo devices than ever before, with plenty of green pasture ahead, as just a fraction of the addressable market already owns at least one smart speaker, there are literally billions of smartphone owners out there -- with Google and Apple having already planted their assistants on them. This poses a more competitive next phase in the road to sustained dominance as voice-first maturity and "Alexa wherever they are" being realized (especially, with Google combining its established position on mobile phones with its growing competitiveness in the smart speaker race).
So, getting back to the question at hand, given the goal Bezos has for Alexa, does Amazon need to have its own smartphone to keep Alexa ahead of the competition? My guess, and that's all it is, is that it doesn't. Now, that's not to say that it wouldn't help Amazon tremendously on its way to having "an Alexa in every pot." If it could pull it off, it would be game-changing... or would that be more of a game-keeper in the current context? But I think it would be extremely difficult at this juncture to pull that one off. Smartphones are a saturated market, and I think it would take more than Alexa to get people to move away from the phones they already own and use. And it may be just as hard to get people to download the Alexa app onto phones it doesn't come natively with, but it would be a less expensive pathway to "wherever."
Maybe Amazon continuing to look to other kinds of devices that aren't in saturated categories is the way to go. I still think a device that turns your car into an Alexa device maybe worth exploring or acquiring. I'm digging my new Roav Viva device that Alexa-enables my car and forces you to put the Alexa app on your iPhone if it wasn't already there. And most other devices that are Alexa-enabled do the same.
I don't think there has to be one answer of either an "Alexa phone" directly coming from Amazon or more devices that need you to install the Alexa app on your current phone. Either could work, depending on the circumstances and expectations. But I do think that, in order for Alexa to be where Bezos wants her to be, it will become harder to achieve the dominance Amazon had in the early days, as the voice-first market moves into a different phase of the maturity cycle. But, with all that said, would anybody be that surprised if it were able to pull it off?
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