Battle for your Home — Amazon vs. The Worldby@ChrisHerd

Battle for your Home — Amazon vs. The World

by Chris HerdSeptember 28th, 2017
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Amazon under-promises then over-delivers more cheaply than competitors

  • Just when you think the competition is catching up, Amazon laps the field.
  • Ahead of Google’s big event next week Amazon has stolen its thunder with a huge upgrade to the Amazon Echo home speaker and an even bigger upgrade to it’s UX
  • The launch of two new speakers might not seem revolutionary but don’t be fooled
  • The revolution is in the extra hardware to streamline the smart home experience — a critical element in the step towards the internet of things
  • But they also implemented a new ‘user voice interface’ than enables users to make use of a fuller range of Alexa’s enviable skill set making it much simpler and intuitive to use
  • Why this puts them ahead of the competition:
  • The echo is now smaller, has better sound quality, offers the consumer more choice of colours and is half the cost of the original at $/£99
  • The new microphone hardware significantly improves audio performance making the user experience considerably better at reducing error rate
  • Critically, the new price point position’s Amazons offering as cheaper than Google’s alternative
  • The echo plus, the bigger model, benefits from all of the above but also has a built in home-hub which is optimised to support all your other internet of things products. It has automatic discovery which allows the set-up of all zigbee supported devices using only your voice
  • Admittedly — though this is a big step towards a centrally focused home hub — it doesn’t yet support anywhere near all devices
  • But it’s collections of partners is already significant and only likely to expand. As more people purchase voice controlled products they must be compatible with the most popular systems, of which Amazon is the undoubted category leader.
  • Amazon routines is a huge development, users can now complete multiple tasks with one command
  • ‘Alexa I’m going to work’ would see all the electrics turned off, the doors locked and the heating paused until 30 minutes before your return
  • It will also be able to schedule the above types of actions upon command
  • Why this update is so important competitively for Amazon:
  • It is markedly cheaper than the nearest competition while featuring better, more reliable hardware at the new lower price point than the competition
  • It makes their competitors rethink their positioning, will Google be forced to change its entire launch next week?
  • The simplification of Alexa skills is the game changer of the announcement. Alexa is now ready for the mainstream. Significantly it now has real utility with the ability to save consumers time and energy with specific tasks
  • Third party integration of Alexa further cements Amazons position as the leader of the digital assistant space
  • Like Android becoming the open source operating system of the alternative smartphone universe, Alexa has positioned itself to become the Operating system of the voice controlled world
  • This is crucial for learning because every device you have more than the competition is one more input that your competition doesn’t have
  • This is a time where acting first put’s you at the head of all innovation while your competitors scramble to react. The problem for the second mover is any innovation is viewed on it’s own, it’s critiqued against the competitions offering
  • Remember to unseat the competition your product has to be at least an order of magnitude (10 x) better
  • The google home assistant may be better right now, but it is not 10 times better than Alexa and Amazon has a head start — these updates erode any lead google had in terms of hardware and usability
  • This is why I believe home assistants are a zero sum game. The intelligence of these units depends on learning and whichever system accumulates the most users, has the most data and will work best

What next?

  • The impending development of the internet of things is the end game. Amazon and Google are vying to become the masters of the home which has major implications to both their industries
  • The confluence of purchasing and data collection means that Amazon and Google will remain adversaries for the home for the foreseeable future
  • There are massive security concerns to having a digital assistant who is listening to every word in your home
  • The missing link in this ecosystem is Samsung
  • They are already in almost every home, be that in the form of white good appliances of televisions
  • Samsung has the potential to disrupt the apple cart by including its own home system inside one/all of these appliances — but they can offer more. They can imbed sensors in their tech that home hubs can’t, in particular cameras. The TV casing has far more space to include additional sensors that can’t be accommodated in a home assistant
  • The central hub which acts as the focal point for all smart home activities becomes the master of destiny for businesses in the home. This is a winner takes all battle so expect it to be to the death between these tech giants
  • It is the master of destiny because it will be the collection point for all smart home connected device data — whether they are made by the company themselves or a third party. The hub will collect and analyse all the data which is where the value is.
  • The biggest question then is this:

Who do you trust most with your data?