Alexa, up the Amazon, need a paddle?

Written by on September 9, 2016 in Guest Blog with 0 Comments

Canoe TrippingAlexa needs to get much smarter. Amazon’s latest software updates show its determination to do well in the parts of Digital Life that it covers, but there are still large parts of its empire being left out in the cold. Amazon’s latest update to the Fire TV and Fire TV Stick allows the user to use Alexa to search through the ever-expanding library of its own content as well as that of its partners.

  • This is the first step is making Alexa the nerve centre of everything that it does for the digital consumer, but there are still big pieces missing.
  • The Fire TV and Fire TV Stick is enabled for voice control only at this time but I can see this quickly being expanded to bring full Alexa functionality to these devices.
  • Amazon has done well to bring partners on board and with the co-operation of Netflix, HBO and others, the functionality also works within these environments.
  • This is hugely important as it is only the combination of a number of different services that makes the Amazon Fire TV a one-stop shop for content.
  • This kind of functionality also enables a much better experience for the user as he no longer needs to hop around from one app to the next to find what he wants.
  • Furthermore, it aids discovery as the indexing of content works across all of these offerings allowing the user to see everything available within certain criteria from all vendors.
  • This is much easier to achieve in video than it is in music as music has close to 50m items to index while video is at a few hundred thousand.
  • Furthermore, video is often released with much better meta data making it easier to find.
  • While this strategy is going very well, there are still areas that really need attention if Amazon is going to be all things digital to all users.
    • Firstly: Integration
    • Amazon has assets that need to be included in its strategy which are currently lying around on the periphery.
    • Top of this list is Twitch, the gaming community that Amazon bought for $1bn.
    • This needs to be brought in and integrated with its games offering on the Fire TV so that Amazon can build on that foundation to produce a great games offering.
    • Gaming in the ecosystem remains the provenance of Microsoft and Sony, neither of whom have any traction at all outside of consoles.
    • As far as the ecosystem is concerned, gaming is the one Digital Life segment that is completely unoccupied and up for grabs (see here).
    • Amazon has shown almost no understanding of the ecosystem to date, and I still see very little to change that view.
    • Alexa will help cement its position in Media Consumption but beyond that there is very little.
    • Second: Artificial Intelligence (AI).
    • Alexa is slowly becoming the hub of all things Amazon but while Alexa certainly has brawn, it has very little brains.
    • Alexa has been painstakingly taught the responses to a series of questions, profanity and insults but beyond that it is too dim to offer much of a challenge.
    • As ecosystems evolve, the importance of AI is only going to become more important as it will become a major differentiator in the user experience.
    • Here I see Alexa way behind Google, Baidu and Yandex who are the leaders in this field mostly because they have been there the longest.
    • However, I also see it behind both Apple and Microsoft whose own offerings are somewhat better at responding to natural speech and lateral enquiries than Alexa is.
    • This is a real problem that rapidly needs to be addressed because if the content user experience evolves to becoming dependent on intelligent machines, then Amazon is at real risk of losing out to Apple TV, Xbox and so on.
  • The net result is that while adding voice adds a nice new dimension to its leading media consumption offering, it does nothing to push an Amazon ecosystem forward.
  • The good news is that the expensive series of random experiments (see here) has given way to something more thought out and commercial which I see as one reason for Amazon’s return to profit.
  • However, the bigger picture still seems to elude the company and until it demonstrated real understanding of the ecosystem, I struggle to get excited about the long term outlook.
  • In this regard, Amazon is bested by Alibaba which appears to understand the ecosystem better and is far more ambitious both in China and overseas.
  • Amazon remains a very high priced stock which I continue to be reluctant to go anywhere near.
  • Microsoft, Baidu and Samsung are my top choices.

This article was first published on RadioFreeMobile.

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Richard Windsor

About the Author

About the Author: Dr Richard Windsor is the founder of Radio Free Mobile which is an independent research provider. The research helps clients to understand and evaluate the players in the digital ecosystem and presents a unique perspective on how all the pieces fit together in an easy to read and digest way. The product is available on a subscription basis and counts members of the handset, telecom carrier, Internet, semiconductor and financial industries as its subscribers. RFM is the land of the one man band meaning that Dr. W. also makes the tea. .

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