Posts Tagged ‘voice assistants’
September 13, 2018
I thought it was funny that Google and Alexa both handed out the neck worn badge holders which nobody seemed to wear.
There are some, but not a lot of companies that are innovating. There were a ton of smart speakers, thermostats, lights, electrical outlets and various appliances that can be controlled by assistants, but little of that rose to the level of true innovation based on where we are today. However, I did see a few new things too
INFRASTRUCTURE PLAYERS ARE BETTING ON AMAZON AND GOOGLE
There’s lots of infrastructure developing 3rd-party support of Alexa, Google and custom voice interfaces. For example, a variety of chip companies like DSPG were showing their ability to enable lower power solutions while design houses like Sugr, StreamUnlimited, and Frontier Smart Technologies can assist with hardware and software development.
OVERALL, MORE EVIDENCE OF VOICE ASSISTANT ACCELERATION
IFA showed the continuing growth and accelerated market adoption of voice assistants. It was a well organized and like CES, IFA had separate locations that required transportation to access through transportation. Berlin, by the way is a fantastic and unique city with a very liberal feel, friendly people, the best Turkish food I’ve ever had, and very international. Parts of it even reminded me of Berkeley in the 1970s. Of course, there is a lot more presence of voice assistants today!
Todd Mozer is CEO and founder of Sensory.
August 13, 2018
It’s not easy to be a retailer today when more and more people are turning to Amazon for shopping. And why not shop online? Ordering is convenient with features such as ratings. Delivery is fast and cheap, and returns are easy and free – if you are Prime member! In April 2018 Bezos reported there are more than 100 million Prime members in the world, and the majority of US households are Prime members. Walmart and Google have partnered in an ecommerce play to compete with Amazon, but Walmart is just dancing with the devil. Google will use the partnership to gather data and invest more in their internal ecommerce and shopping experiences. Walmart isn’t relaxing, and is aggressively pursuing ecommerce and AI initiatives through acquisitions, and its Store #8 that acts as an incubator for AI companies and internal initiatives. Question: why does Facebook have a Building 8 and Walmart have a Store 8 for skunkworks projects?
It’s not just the retailers that are under pressure, though. If you make consumer electronics it’s getting more challenging too. Google controls the Android eco-system and is pumping a lot of money into centralizing and hiring around their hardware development efforts. Google is competing against the mobile phones of Samsung, Huawei, LG, Oppo, Vivo, and other users of their Android OS. And Amazon is happy to sell other people’s hardware online (OK, not Google, but others), but they take a nice commission on those sales, and if it’s a hit product they find ways to make more money through Amazon’s in house brands and warehousing, and potentially even making the product themselves. The Alexa fund has financed companies that created Alexa based hardware products that Amazon ended up competing against with in-house developments,and when Amazon sells Alexa products it doesn’t need to make a big profit (as described in part one). And Apple… well, they have a history of extracting money from anyone that wants to play in their eco-system too. This is business and there’s a very good reason that Google, Amazon, Apple, and other giants are giants. They know how to make money on everything they do. They are tough to compete with. The “free” stuff consumers get (and we do get a lot!) isn’t really free. We are trading our data and personal information for it.
So retailers have it tough (and assistants will make it even tougher), service providers have it tough (and assistants with service offerings make it even tougher), and consumer electronic companies have it tough. But the toughest situation is for the speaker companies. The market for speakers is exploding driven by the demand for “smart” speakers. Markets and Markets research report the current smart speaker market at over $2.6B and growing at over 34% a year. Seems like that would be a sweet market to be in, but a lot of that growth is eating away at the traditional speaker market. So a speaker company gets faced with a few alternatives:
Many are choosing option 1 only to find that their sales are poor because of better quality lower priced offering from Google and Amazon. A company like Sonos, who is a leader in high quality wifi speakers has chosen option 1 with a twist where they are trying to support Google and Amazon and Apple. Their recent IPO filing highlights the challenges well:
”Our current agreement with Amazon allows Amazon to disable the Alexa integration in our Sonos One and Sonos Beam products with limited notice. As such, it is possible that Amazon, which sells products that compete with ours, may on limited notice disable the integration, which would cause our Sonos One or Sonos Beam products to lose their voice-enabled functionality. Amazon could also begin charging us for this integration which would harm our operating results.”
They further highlighted that their lack of service integrations could be a challenge should Google, Amazon or others offer discounting (which is already happening): “Many of these partners may subsidize these prices and seek to monetize their customers through the sale of additional services rather than the speakers themselves,” the company said. “Our business model, by contrast, is dependent on the sale of our speakers. Should we be forced to lower the price of our products in order to compete on a price basis, our operating results could be harmed.” Looking at Sono’s financials you can see their margins already starting to erode.
Some companies have attempted #2 above by bringing out in house Assistants using open-source speech recognizers like Kaldi. This might save the cost of deploying third party solutions but it requires substantial in house efforts, and is ultimately fraught with the same challenges as #3 above which is that it’s really hard to compete against companies approaching a trillion dollar market capitalization when these companies see AI and voice assistants as strategically important and are investing that way.
Retailers, Consumer OEMs, and Service providers all have a big challenge. I run a small company called Sensory. We develop AI technologies, and companies like Google, Amazon, Samsung, Microsoft, Apple, Alibaba, Tencent, Baidu, etc. are our customers AND our biggest competitors. My strategy? Move fast, innovate, and move on. I can’t compete head to head with these companies, but when I come out with solutions that they need BEFORE they have it in house, I get a 1-3 year window to sell to them before they switch to an in house replacement. That’s not bad for a small company like Sensory. For a bigger company like a Sonos or a Comcast, they could deploy the same general strategy to set up fast moving innovation pieces that allow them to stay ahead of the game. This appears to be the exact strategy that Walmart is taking on with Store 8 to not be left behind! Without doubt, it’s very tough competing in a world of giants that have no boundaries in their pursuits and ambitions!
August 6, 2018
Here’s the basic motivation that I see in creating Voice Assistants…Build a cross platform user experience that makes it easy for consumers to interact, control and request things through their assistant. This will ease adoption and bring more power to consumers who will use the products more and in doing so create more data for the cloud providers. This “data” will include all sorts of preferences, requests, searches, purchases, and will allow the assistants to learn more and more about the users. The more the assistant knows about any given user, the BETTER the assistant can help the user in providing services such as entertainment and assisting with purchases (e.g. offering special deals on things the consumer might want). Let’s look at each of these in a little more detail:
1. Owning the cross platform user experience and collecting user data to make a better Voice Assistants.
Owning the user experience on a single device is not good enough. The goal of each of these voice assistants is to be your personal assistant across devices. On your phone, in your home, in your car, wherever you may go. This is why we see Alexa and Google and Siri all battling for, as an example, a position in automotive. Your assistant wants to be the place you turn for consistent help. In doing so it can learn more about your behaviors…where you go, what you buy, what you are interested in, who you talk to, and what your history is. This isn’t just scary big brother stuff. It’s quite practical. If you have multiple assistants for different things, they may each think of you and know you differently, thereby having a less complete picture. It’s really best for the consumer to have one assistant that knows you best.
For example, let’s take the simple case of finding food when I’m hungry. I might say “I’m hungry.” Then the assistant’s response would be much more helpful the more it knows about me. Does it know I’m a vegetarian? Does it know where I’m located, or whether I am walking or driving? Maybe it knows I’m home and what’s in my refrigerator, and can suggest a recipe…does it know my food/taste preferences? How about cost preferences? Does it have the history of what I have eaten recently, and knows how much variety I’d like? Maybe it should tell me something like “Your wife is at Whole Foods, would you like me to text her a request or call her for you?” It’s easy to see how these voice assistants could really be quite helpful the more it knows about you. But with multiple assistants in different products and locations, it wouldn’t be as complete. In this example it might know I’m home, but NOT know what’s in my fridge. Or it might know what’s in the fridge and know I’m home but NOT know my wife is currently shopping at Whole Foods, etc.
The more I use my assistant across more devices in more situations and over more time, the more data it could gather and the better it should get at servicing my needs and assisting me! It’s easy to see that once it knows me well and is helping me with this knowledge it will get VERY sticky and become difficult to get me to switch to a new assistant that doesn’t know me as well.
2. Entertainment and other service package sales.
3. Selling and recommending products to consumers
It would be really obnoxious if Alexa or Siri or Cortana or Google Assistant suddenly suggested I buy something that I wasn’t interested in, but what if it knew what I needed? For example, it could track vitamin usage and ask if I want more before they run out, or it could know how frequently I wear out my shoes, and recommend a sale for my brand and my size, when I really needed them. The more my assistant knows me the better it can “advertise” and sell me in a way that’s NOT obnoxious but really helpful. And of course making extra money in the process!
July 25, 2018
I have spoken on a lot of “voice” oriented shows over the years, and it has been disappointing that there hasn’t been more discussion about the competition in the industry and what is driving the huge investments we see today. Because companies like Amazon and Google participate in and sponsor these shows, there is a tendency to avoid the more controversial aspects of the industry. I wrote this blog to share some of my thoughts on what is driving the competition, why the voice assistant space is so strategically important to companies, and some of the challenges resulting from the voice assistant battles
In September of 2017 it was widely reported that Amazon had over 5000 employees working on Alexa with more than 1000 more to be hired. To use a nice round and conservative number, let’s assume an average Alexa employee’s fully weighted cost to Amazon is $200K. With about 6,000 employees on the Alexa team today, that would mean a $1.2 billion investment. Of course, some of this is recouped by the Echo’s and Dot’s bringing in profits, but when you consider that Dots sell for $30-$50 and Echos at $80-$100, it’s hard to imagine a high enough profit to justify the investment through hardware sales. For example, if Amazon can sell 30 million Alexa devices and make an average of $30 per unit profit, that only covers 75% of the cost of the conservative $1.2 billion investment.
Other evidence supporting the huge investments being made in voice assistants is the battle in advertising. Probably the most talked about thing at 2018’s CES show was the enormous position Google took in advertising the Google Assistant. In fact, if you watch any of the most expensive advertising slots on TV (SuperBowl, NBA finals, World Cup, etc.) you will see a preponderance of advertisements with known actors and athletes saying “Hey Google,” “Alexa,” or, “Hey Siri.” (Being in the wakeword business, I particularly like the Kevin Durant “Yo Google” ad!)
And it’s not just the US giants that are investing big into assistants: Docomo, Baidu, Tencent, Alibaba, Naver, and other large international players are developing their own or working with 3rd party assistants.
So what is driving this huge investment companies are making? It’s a multitude of factors including:
In my next blog, I’ll discuss these three factors in more detail, and in a final blog on this topic I will discuss the challenges being faced by consumer OEMs and service providers that must play in the voice assistant game to not lose out to service and hardware competition from Apple, Amazon, Google, and others.