“Alexa, why are you winning the smart home market?”
IT SEEMS EVERY APPLIANCE THAT’S ANY APPLIANCE IS ADDING ALEXA
It seems every appliance that’s any appliance is adding Alexa support at CES 2017, giving Amazon a commanding lead in the race to become the de facto smart home standard.
THERE IS A LOVE OF AMAZON’S SKILL BASED VOICE PLATFORM
Here in Las Vegas, and the United States, it’s clear that there is a love of Amazon’s skill-based voice platform and how it’s bringing useful smart home features to life faster than any other platform. But as someone who lives in Australia, where Amazon Echo has not launched, I’m left wondering when we’ll get to join Alexa’s gang.
But this isn’t a story of FOMO or sour grapes. In the battle to become the brand that is synonymous with the smart home experience, building a global footprint will become important very soon. In a global market for smart home appliances and services, selling to two of 200 countries won’t keep you in the driver’s seat for long.
ALEXA HAS ONLY PUBLICLY LAUNCED IN THE US AND UK
To date Alexa has only publicly launched in the US and UK. That does make sense. Alexa helps Amazon make more money only when it’s integrated into its suite of services and can order you home delivery shopping from local warehouses.
In Australia, we can’t buy most of the Amazon product catalogue because they can’t be shipped to Australia from the USA. We have Audible, we have Kindle and we only just got Amazon Prime Video. To bring us the complete Alexa experience requires a massive investment in warehousing infrastructure that takes a lot more commitment than just selling a bunch of smart speakers.
But the essence of a smart home platform isn’t really about selling a few specific services and groceries. It’s about making the appliances, lights and services around my home work together seamlessly. And it’s the easy answers to quick questions about weather, news, trivia and other useful tips and tricks. Alexa just happens to have worked really well for all these things too. Hardware manufacturers seem to find Alexa to be an easy enough platform to integrate with, giving it that tipping point feeling at CES this year. A smart appliance is suddenly taking a risk if it ignores Alexa in the US market right now.
BUT, IT IS A FRAGILE DOMINANCE
But it’s a fragile dominance. It’s a software layer that can be swapped out for an alternative without too much fuss. Vendors haven’t locked themselves into Alexa, they’re just supporting the market leader. Should another platform gain traction Alexa can be replaced, or simply become one of a number of supported options, just as quickly as it has been added to everything at this CES.
Alexa has already seen companies choose to bump other technologies in its favour. LG’s Instaview refrigerator was first announced with Microsoft’s Cortana integrated at IFA just four months ago. But here at CES, Instaview officially launched with Alexa instead.
That fridge isn’t going to sell millions of units, of course. But as an example of Alexa’s geo limitation, should it launch in territories outside the Amazon Alexa footprint, it may well go back to having Cortana in those locations instead (or something else that plays better with LG’s own webOS).
One direct example of this is the Lenovo Smart Assistant speaker announced here at the show. In the USA, it’s launching with Alexa. But first, it’s launching in China with a different voice assistant technology from AISpeech.
There’s a big question for Amazon right now. Could they let Alexa spread her wings and go global regardless of where its services and warehouses have launched? She might lose a few skills, but she’ll still be useful on many levels. Most importantly, she could leverage her big American advantage and solidify Amazon’s claim to the voice assistance throne.
Some enthusiastic and impatient fans have been buying Amazon Echo to use in non-supported countries and to date it seems that there are quirks to the system. You need to pretend you’re in a supported timezone, for one, and that means the clock settings won’t be aligned with your actual location. A whole range of skills become awkward or unusable under such conditions.
(Some people have been hacking the API to get around this issue. But that’s a long way from a mainstream solution to making Alexa go global.)
When Echo launched in the UK, we saw a lot of love given to the local accent and local culture. So as a precedent we see that Amazon wants to give detailed attention to each market it launches Alexa into. It takes a lot of effort to work up cultural in-jokes and local slang, but there’s no question people love it when products care about the local details. This all takes time, so it seems unlikely Amazon has an interest in just opening the gates to buyers everywhere.,
If Amazon sticks to its status quo on keeping Alexa tied to its US and UK regions, it gives its competitors a chance to gain traction. Install base is everything for smart home. People will only code for it and support it if they think there’s a good base of users to service.
In previous years at CES we’ve watched the smart home market slowly simmer along with no real sales pitch to get consumers excited. Suddenly Alexa has lit the fire under this market and competitors are on notice. Move quickly, move now, or lose your chance. But the door is not closed. There’s a big market out there with no Alexa to compete with and a lot of people eager to smarten up their homes.
In the end, we will all thank Amazon for what Alexa is doing to the smart home industry. The pace is speeding up. We’ll all have a smarter home sooner thanks to Alexa’s leadership.
Whether all of us around the world end up thanking Alexa herself, or Siri, Cortana, Viv or another personified voice in a box, remains to be seen.
“Alexa, pat yourself on the back.”