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Amazon pours resources into voice assistant Alexa
Ecommerce group hopes digital mind involved will become ubiquitous
When Amazon launched Alexa, its intelligent voice assistant, it did so on the back of an embarrassing failure. The company’s attempt to make a success of a smartphone called the Fire had flopped, forcing a $170m writedown in late 2014. Analysts called it one of the worst phones made.
The end of the Fire phone seemed to dash Amazon’s hopes of developing its own mobile platform. At a time when Apple had the iPhone, and Alphabet had its ubiquitous search engine, Amazon was desperate to find ways to reach customers directly without going through a rival tech company.
Although few expected it at the time, Alexa has given Amazon precisely the entrée it had been seeking with the Fire phone — just in a different format. Instead of asking users to interact with a screen, Alexa is entirely voice based.
The initial Alexa product, the Echo speaker, was launched just two weeks after the Fire phone writedown and became the first voice-controlled speaker to have mass public appeal. In the two years since its release, Alexa has spread like wildfire, and the voice service is now integrated into dozens of home gadgets, including refrigerators and, soon, cars.
Amazon hopes that Alexa Voice Services, the digital mind behind the assistant, will become ubiquitous wherever voice commands are used.
The company has succeeded in unlikely business areas before, most notably with Amazon Web Services, its cloud computing business. Launched 10 years ago, AWS exploited its first-mover advantage and is now the biggest cloud computing provider in the world.
Replicating that success with Alexa will not be easy, but Amazon has already put big resources behind the effort. To encourage adoption, the company sells its Alexa devices at a loss — pricing them between 10 and 20 per cent less than the cost of the hardware, according to an estimate from Evercore. The company has never disclosed how many Alexa-enabled devices it has sold.
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