Amazon's hardware event showcasing nine new Echo devices including Echo Frames and Echo Loop, a smart ring, as well as two new Ring cameras, a bevy of Alexa features and new Eero mesh wi-fi system rhymes with the product cadence taken by Amazon Web Services.
AWS launches so many new services at re:Invent that it's hard to keep up. Some of these services are anticipated, some are helpful to developers and some are complete flyers (see AWS DeepRacer). In any case, the approach has made AWS the leading public cloud vendor.
The Alexa and hardware teams have adopted a similar approach. Sure, the Echo Studio was anticipated as well as the Echo Buds. An Echo Dot with click and Echo Flex are helpful. But the Echo Loop is a bit of a wild card. Do we really need or want a smart ring? Are we marrying Alexa? It doesn't matter really since Alexa dominates in smart speakers and is embedded everywhere.
Connecting the dots between the Amazon hardware teams and AWS is worth pondering on a few levels. Consider:
- Amazon may be formalizing a company-wide carpet-bomb approach to entering categories. If Amazon ever gets back into smartphones, maybe it's 5 devices at once.
- Perhaps the hardware and AWS cadence for product launches rhyme because it's essentially the same team. It's hard to argue that the Echo line is just a front end for Alexa, which is powered by AWS. Through that prism, we're all AWS customers.
- Or the connective tissue between AWS and the hardware team is the upsell and adjacent business models. AWS starts with storage and compute and then gets into machine learning, augmented reality, artificial intelligence, and many more services. Hardware and Alexa are about adjacent e-commerce and monetization well beyond the devices. After all, it's clear that Amazon devices are just a vehicle to get you to consume more services from the e-commerce giant.
Where this Amazon hardware, Alexa, AWS continuum gets interesting is in the workplace. Bring your own applications and devices is already an established enterprise practice (sometimes headache) and Amazon is ensuring that Alexa will be all over your office. There is Alexa for Business and rest assured Echo Loop may be able to help you schedule a conference room.
If you consider that basic smart office scenario, Amazon's hardware event is more of an extension of Alexa in business and AWS.
In any case, Amazon's hardware event delivered enough of a frenetic cadence to make you go hmmm. Like AWS, Amazon's hardware unit is about figuring out multiple needs and addressing them. At first, Amazon's approach is to be everywhere. Then comes the business model.
Benjamin Schachter, an analyst at Macquarie, recapped the Amazon hardware event:
The new devices today are all interesting to varying degrees, but mostly incremental. However, while Alexa is growing rapidly, the business model itself is still evolving. We don't think Amazon intends to make significant money from hardware sales directly, but rather from increasing touchpoints to the overall ecosystem and app store-like models.
That take also resembles Amazon's approach with AWS. The formula: Touchpoints, ecosystem and selling products, and services everywhere.