What's the Point of Alexa?


Tech blogger Om Malik writes that Amazon mentioned Alexa a record 25 times in their recent quarterly earnings release:
“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.”
-          Alexa, in case you live in a cave, responds to your queries, commands to play music, gets the news or whatever;
-          Alexa also acts as the interface to other home devices from over 4,500 brands e.g. voice-controlled smart lights. Says Amazon, humans spoke to “Alexa tens of billions of more times in 2018 compared to 2017”;
-          Developers write “skills” for Alexa that are like mini-features. The number of Alexa skills now stands at 80,000;
-          Alexa has sold over 100 million units (that’s including 3rd party devices with Alexa embedded in them).
Wow! The numbers do blow your mind.

Ben Evans courageously asks the “Is the emperor naked?” question:
“What fundamental strategic benefit does it (Amazon) get? Amazon has put an end-point into tens of millions of homes - what does it do with it?”
If Google or Facebook had made Alexa, the use to the company would be obvious: collect yet more data, find a way to make money of that data. If Apple had made it, it’d either be costly (and make money) or serve as a good-to-have accessory for the iPhone. But Amazon?
“Amazon, on the other hand, sells things. Its TV shows help it sell things by driving Prime, which pulls your purchase of children’s shoes or soap into Amazon. It’s not yet clear what Alexa does for this.”

Since Amazon isn’t answering, Evans takes a stab at possible reasons:
-          It’s just a form of marketing;
-          It may enable automated ordering (“the washing machine can order more soap for itself”);
-          A brand could create an Alexa skill that “talks you through how to use a product when you need ongoing instructions and can’t use your hands”;
-          It’s an Amazon experiment. It may fail like the Fire Phone or it may succeed like the Amazon Prime scheme or fall somewhere in between;
-          Or it may be a protective measure, the way Google bought and developed Android out of fear of getting locked out of mobile by Microsoft (yes, Microsoft, not Apple, was the likely player to grab mobile back then!). And just as Google doesn’t make money of Android, but saves the money it pays Apple to make Google the default search engine on the iPhone, Alexa may be a moat to ensure that Amazon can’t be locked out of the home/voice segment in the future.

Only time will tell the reason… but it’s interesting to speculate until then.

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