Given its dominance of the e-commerce and cloud services, Amazon, not surprisingly, had a great fourth quarter of 2018. I was checking out their earnings release this morning, and one thing that struck me was the number of times they mention Alexa in the press release — 25.
That’s a lot. But it’s not just that. It is how they talk about it. They are telling us again and again; this is their next big thing. It is going to be perhaps as big as the original Amazon itself. It is going to be their real and meaningful barrier to entry for rivals.
It is not clear about the size of Alexa’s ecosystem presence — Amazon has hinted at about 100 million. In the press release, Jeff Bezos, Amazon founder, and CEO mentioned, that “developers doubled the number of Alexa skills to over 80,000” and humans spoke to “Alexa tens of billions of more times in 2018 compared to 2017.” There are 28,000 Alexa-compatible smart home devices from more than 4,500 unique brands, the company noted. And you can even access Apple Music on Echo devices.
It took about a decade after launch before Amazon started to give clarity around their cloud operations and provided that the first Echo device launched in 2014, it would be a while before we get less ambiguous information from Amazon. A recent survey by Voicebot.Al shows that Amazon has about 65 percent of the smart speaker market in the US.
Alexa and Google (Assistant) are duking it out in this race of invisible interfaces, alongside laggards like Apple and Microsoft. Invisible interfaces have been an area of interest to me, mostly because with four significant platforms — Amazon, Apple, Google, and Microsoft becoming players in these interfaces, how do startups find meaningful success in the future, and more importantly, how does it impact the future of independent service providers, who will have to allocate their resources to more and more platform.
With yet another platform layer emerging, is the dream of a lean startup coming to an end? And if that is not enough, we are not even talking about the regulations around privacy and data around these devices that can listen and track us inside our homes.
February 1, 2019, San Francisco
