Amazon Alexa

Amazon.com, Inc. (NASDAQ:AMZN) have announced that they are bringing their AI digital assistant, Alexa to the iOS platform for the first time ever. Amazon declared that users will now be able to access Alexa from inside Amazon’s iOS app. This comes on the heels of Amazon also publishing the Alexa companion app for Android devices recently.

This, apparently, is a worrying development for Apple Inc. (NASDAQ:AAPL) and their in-house digital assistant, Siri. The tech behemoth has been investing a lot on Siri for many years anticipating voice technology as the driver of future growth of computing. With Alexa offering similar functionality, and even better in many use cases, Siri has a strong contender in its own ecosystem.

Coming out of Amazon factory, Alexa could provide some stiff competition to Siri, and may harm Apple’s own ambitions towards their AI assistant. Lets dig deep into this recent development to analyse

  • What Alexa is upto?
  • Will Alexa prove to be Siri killer?
  • Will the development take the AI assistance to a whole new level?
  • Considering Apple’s rich history of innovation, how Alexa will have to keep reinventing itself.

Alexa: The New Player On The Block

In November 2014, Amazon announced Alexa along with their Echo Dot smart speaker. Touted as an intelligent personal assistant, Alexa launched without much hype or fanfare. However, its popularity has exploded since then. CES 2017 showcased the enormous potential of this technology, with many products integrated with Alexa. The market for digital assistants is expanding rapidly, with AI expected to become the basis for human interaction with various devices in the near future. Allied Market Research predicts the market for digital assistants to grow to $3.6 billion by 2020. Additionally, RBC Capital Markets predicts that Alexa could bring in as much as $10 billion in revenue for Amazon by 2020. With so much at stake, we can expect all the major players to pull out all the stops in the pursuit of this technology.

The Siri Killer?

The biggest, and most immediate consequence of Alexa’s launch on the iPhone will be felt by Siri. Developed by Apple themselves, Siri has been a mainstay in Apple devices since the launch of the iPhone 4S back in 2011. Unlike Amazon’s Alexa, Siri launched to immense hype and fanfare. Ultimately, Siri failed to live up to expectations and was relegated to only occasional novelty use by most users. However, a lot has changed since then. There have been significant improvements in voice recognition and AI technology. Competition from the likes of Microsoft, Google and Amazon has driven Apple to keep improving Siri, but will it be enough?

Alexa has some significant advantages over Siri, some of which could ultimately lead to Siri’s demise.

  • Amazon’s More Open Source Approach – One of the biggest leg ups that Alexa has over Siri is Amazon’s willingness to collaborate with third parties. The basis of Alexa’s functionality is “skills”. These are apps which enable new functionality for Alexa. Amazon’s decision to allow third party developers to create these “skills” is paying off big time. It has enabled in the rapid development and expansion of Alexa’s functionality. In contrast, Siri, which is a completely in-house project, is limited to only Apple provided functionality.
  • The Creation Of An AI Based Digital Ecosystem – While Apple’s Siri has been limited to Apple mobile devices till now, Amazon is making a huge push for Alexa integration in a multitude of devices, and not just limited to smartphones/tablets. Announcements at CES 2017 of collaboration with LG on their new refrigerator and  Huawei’s Mate 9 smartphone indicate Amazon’s massive ambitions for Alexa. Products like sous vide tools, intercoms, remote controls integrated with Alexa already exist. The Wemo insight Switch allows complete home automation using Alexa. As we move towards an AI based digital ecosystem and the rise of the “Internet of Things”, people may gravitate towards Alexa for a more seamless experience across various devices.
  • Amazon Integration – Alexa is directly integrated with Amazon’s e-commerce arm. Now shopping via Amazon has been made as easy as simply saying what you want. This represents a massively beneficial symbiotic relationship for Amazon. Alexa helps drive their e-commerce business, whereas the Amazon integration lures users towards Alexa. In fact, some reports predict that Alexa may bring in $10 billion in revenue for Amazon by 2020.
  • Alexa is based on more accomplished technology – While it is still early days in the AI digital assistant wars, it is safe to say that Alexa is leading the pack in terms of functionality and ease of use. A showdown by Tomsguide found Alexa to be superior to Siri in most categories. Alexa was found to have better voice recognition, faster response times and better availability. Alexa also had much better integration for shopping and music services. Additionally, Alexa was better at contextual conversations too.

All Is Not Lost For Siri

While Alexa’s introduction to iOS may put a significant dent in Siri’s user-base, it is by no means a death sentence. Apple have invested heavily in Siri, and it is not likely they will abandon it anytime soon. Siri still has a couple of big advantages. First is its deep integration in the iOS platform. Siri can be accessed directly in OS, from anywhere. In contrast, Alexa will only be accessed through the Amazon app. Secondly, with Apple’s immense financial muscle and commitment to AI, Siri can be expected to improve along with the competition.

Takeaways

  • The market for digital assistants in expanding at a rapid pace and will be worth $3.6 billion by 2020.
  • Alexa has been a hit for Amazon and is expected to rake in revenues worth $10 billion by 2020.
  • Amazon’s Alexa may seriously dent Siri’s user base on the iOS platform in the immediate future.
  • Alexa’s Amazon and “Internet of Things” integration, and “skill” based development model has given it a leg up over the competition.