- Amazon recently announced a few new smart devices, such as clocks, plugs, microwaves, and locks, which are all Alexa-enabled.
- The company is using Alexa to dominate the smart home before its competitors.
- In the video above, Business Insider’s Dennis Green weighs the pros and cons to having a home run by Alexa.
Following is a transcript of the video.
Dennis Green: Amazon wants Alexa everywhere so that it can build this ecosystem that customers are kind of trapped in. They have got clocks, they have got timers, they have got microwaves, all Alexa-enabled. And it’s really like a bid to own the home. In the end, the consumer kind of loses in this spat.
So Amazon’s kind of putting Alexa in everything because it wants this fully featured experience for customers that’s completely seamless. If you need popcorn for your microwave, you run out, you know, it will automatically order it for you. If you want to rent a movie it’s right there, you can just press rent and it’s immediately on your screen. You want to hear any music, any song, just say the word and Alexa will deliver it for you. It’s this ecosystem that makes it easier in the system than outside of the system. It’s frictionless, which means that money can flow freely from your pocket to Amazon via Alexa.
This fragmented ecosystem can sometimes cause problems for customers. For example, Amazon doesn’t allow Google to sell its home devices on Amazon.com, and in response Google blocked YouTube from both Amazon’s Fire and Echo devices. However, Alexa can still be useful to the Amazon flywheel. Instead of focusing on physical retail, it’s focusing on digital retail.
When Amazon first unveiled its Alexa platform it was kind of supposed to be this voice-shopping experience that customers would love, where they could just ask for toilet paper and it would be delivered in two days. That future hasn’t really materialised. We’re seeing a lot of data that shoppers are not actually using the platform for voice shopping. Instead, they’re using it for both entertainment and utility. That means rent movies or subscribe to an unlimited music service, or, you know, use the smart-home features to turn lights on and off and things like that.
You can see this in the Smart Plug device that they have developed, where you can plug it into the wall and Alexa will immediately recognise it and you just say, “Yes, I want to set it up,” and then it’s done. This is definitely a bid to kind of bring in that consumer that’s maybe a little bit afraid of the connected home, a little bit afraid of voice commands, a little bit afraid of that whole thing. It wants people to be comfortable enough to, you know, that your grandmother could do it.
And so Amazon keeps adding new features to its Alexa platform. A lot of that is with hardware and a lot of that is with software. A software example is this Amazon Guard feature that Amazon unveiled earlier in September. Amazon Guard uses artificial intelligence to kind of intelligently turn your lights on and off, to kind of ward off intruders. And Alexa enables Amazon to do a lot of other stuff, even with its e-commerce platform. Amazon earlier this year unveiled its Amazon Key service, which allows Prime customers to actually get their packages delivered inside their house.
Alexa does enable Amazon to kind of own this smart home space early. It’s kind of gotten there before any of its competitors and it’s kind of cemented itself, especially with all of these new devices coming out, as kind of the leader. I could see them adding things like with the Kindle, where they have an addition that has advertisements for a lower price or just you know, advertising things that you might want to buy that you could just say, “Amazon, buy the thing that’s on the screen right now,” and kind of monetizing it that way. But I’m sure we haven’t seen anything yet.
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