Last week, Amazon has introduced an astonishing amount of new hardware onto the market, further expanding the amazon IoT ecosystem. For instance, the speech assistant Alexa is now available on a speaker with a screen (Echo Show 8), on a pair of glasses (Echo frames), on wireless headphones (Echo buds), in a microwave (Amazon Smart Oven) and even as a finger ring (Echo loop). Moreover, Amazon has launched an Alexa-enabled light (Echo glow), home cameras which can be integrated with a doorbell (ring cam) and a dog tag (Ring fetch) (Perez, 2019).The Echo frames and the Echo loop will initially only be launched on the market in small quantities. “If the customers love them, we will increase the use and build even more,” says a blog entry of the company (Amazon, 2019). However, Amazon’s product trials are more than just a taste test. The company has more or less invented the market for language assistants and is now seeking to retain power and occupy much of the market.
Amazon Ring Fetch
Amazon smart oven
Currently, the language assistant is a type of remote control to a convenient way to play music, see the weather or set the alarm, but the customer benefit of Alexa has been very limited so far. And looking at the price for the newly launched devices also reveals that Amazon is not looking to directly generate revenue from hardware sales. In fact, Amazon is a shopping platform and the hardware is a means to drive sales on the website. The devices with voice control are something like the entrance door to the supermarket, the department store and the specialist shop in one. Amazon wants to dominate distribution. The only crucial question is: Why isn’t voice shopping working properly yet? And what can Amazon do to change this? The numerous new products suggest that Amazon itself has no answer to this question.
So why is Amazon implementing a costly experiment which might not even yield the expected outcome? The answer lies within the data about customer spending habits that Amazon is will be able to collect and analyze. In order to optimize marketing in the future, it is key to offer products and service timely, contextually, conveniently and easy to consume. Ultimately, smart devices will allow the firm to integrate seemlessly into people’s everyday lives and habits. Interestingly, Amazon emphasised that customers can delete individual records and will provide a function for Alexa devices that will automatically delete records after three or 18 months. (Holzki, 2019). If orders remain absent, it might also be due to the fact that the ring is not exactly a piece of jewellery. Only true evangelists of the amazon ecosystem might be willing to put the chunky piece of plastic to their finger. However, the company’s proven strategy is to try it out, experiment to see what works – and then invest in developing the right products.
What do you think about Amazon’s aggressive strategy in the home device market and will the firm be able to generate a competitive advantage over Google’s Nest and Apple’s Home Pod by flooding the market with new products? Are you an early adopter of innovative beta products or do you prefer to wait until the devices have matured?
Amazon (2019) Retrived from: https://blog.aboutamazon.com/devices/amazon-devices-event-september-2019
Holzki, L. (2019, September 26th) Hauptsache es spricht, warum Alexa noch kein Geschäftsmodell ist. Handelblatt. Retrived from: https://www.handelsblatt.com/meinung/kommentare/kommentar-hauptsache-es-spricht-warum-alexa-noch-kein-geschaeft-ist/25055992.html
Perez, S. (2019, September 26th) Everything Amazon announced at its Alexa event. TechCrunch. Retrived from: https://techcrunch.com/2019/09/25/everything-amazon-announced-at-its-alexa-event-today/
Dear Julia,
What a brilliant blog post. I was getting more and more surprised, as I was moving to the next sentences by this ‘unusual’ strategy of Amazon of releasing so many novel products at once. Clearly they are hunting new data from their customers. Yet, I find it difficult to believe that all of these gadgets will be adopted by the majority. How do you think Amazon can market so many new innovations in the same time? This aggressive strategy of the retailer might be considered a desperate response to the competitors’ success, since Google or Apple definitely have a higher market share when it comes to smart devices. Nevertheless, I personally not engage in this game of Amazon, because I prefer to step aside for the moment and see which of its products will actually make it until next year and which of them will be pulled off production. I look forward to the future news.
Hi Mihai,
Thank you very for sharing your thoughts! I did some research on smart speaker market shares and was actually surprised to find out, that Amazon is still leading in terms of smart home speaker sales and that 1 in 4 Americans already owns a smart speaker (Routley, 2019). Personally, I agree with your point and would also not feel comfortable installing Alexa products or other smart speakers and cameras at home. But there are numerous sources predicting a future increase of smart home devices and the general public seems to be very receptive of the idea. For instance TechCrunch reports that there will be “8 billion digital voice assistants in use by 2023, up from the 2.5 billion assistants in use at the end of 2018” (Perez, 2019). Since Amazon’s gadgets are offered at a competitively low price, it makes them an attractive option for consumers who want to try out smart devices.
Routley, N. (2019) https://www.visualcapitalist.com/smart-speaker-market-share-fight/
Sterling, G. (2019) https://marketingland.com/alexa-devices-maintain-70-market-share-in-u-s-according-to-survey-265180
Perez, S. (2019) https://techcrunch.com/2019/02/12/report-voice-assistants-in-use-to-triple-to-8-billion-by-2023/
Hi Julia,
very interesting article.
In my opinion these connected devices allow the companies to be part of your private life and to obtain data from it.
As you mentioned the big companies like amazon recently pushed more towards privacy, as they now offer the option to automatically delete your recordings after either three or 18 months.
However, because their language assistants are all AI based, they use this data for the machine learning. Even if it is only for three months.
Apparently it is not only an algorithm who reviews your data. As stated in the article by Lomas (2019) human workers are also listening to your highly sensitive personal data.
As this procedure was not clearly mentioned in their user policies the companies were pressured to adapt their policies, after this became public. For example, Amazon did so and offers now an option to opt out of the manually review. But the company did so in a very inconspicuous way.
Why do these firms not inform the user previous to such leaks how they use their data?
Lomas, N. (2019). Amazon’s lead EU data regulator is asking questions about Alexa privacy. [Online] Available at: https://techcrunch.com/2019/08/09/amazons-lead-eu-data-regulator-is-asking-questions-about-alexa-privacy/ [Accessed: 14.10.19].