Amazon.com, Inc.’s (AMZN) Alexa is on a roll.
Based on reports from tech journalists who attended the Consumer Electronics Show (CES) in Las Vegas last week, Alexa was the winner at this year’s event. The chirpy, wise-cracking voice assistant’s technology seems to have permeated a variety of consumer products – from Ford Motor Company’s (F) cars to home security behemoth ADT Corp.’s (ADT) systems. Even rival Alphabet Inc. subsidiary Google’s (GOOG) smartphone manufacturing partner Huawei Technologies Co. installed an app that accesses the voice assistant on its phone.
To be sure, it is still too early to decide the winner in an emerging technology. Alexa faces formidable competition from the likes of Apple Inc.’s (AAPL) Siri, Microsoft Corp.’s (MSFT) Cortana and Google’s Google Assistant. (See also: Can Amazon Echo Compete With Siri?) Still, Amazon’s early lead is noteworthy and could benefit its bottom line in the short term.
There are a couple of advantages to Alexa’s burgeoning popularity for Amazon.
For starters, the device could help Amazon mop up increasing amounts of useful consumer data that could translate into future sales in the e-commerce value chain. “Alexa is becoming an operating system, like Windows or Android before it, except now for homes increasingly filled with Internet-connected stuff,” the Wall Street Journal’s Geoffrey Fowler writes.
The “Internet-connected stuff” translates into a trove of data for Amazon. As an example, it provides the company with a peek into customers’ grocery shopping lists at a time when the company is making increasingly bold moves into the field. (See also: Amazon May Have Just Killed The Grocery Store.) Data from Alexa could also help Amazon’s other services, such as Amazon streaming.
Alexa could also help Amazon achieve a network effect within the Internet of Things ecosystem without incurring considerable costs. The Seattle-based company became a destination for products by aggregating multiple vendors under a single website. Alexa’s popularity could have the same results for a fresh crop of products that are connected to the Internet. As an example, Alexa’s integration with appliances made by Whirlpool Corporation (WHR) could benefit the bottom line for both companies.
Alexa announced 35 new partners last week, In an interview with USA Today, Amazon Alexa vice president Steve Rabuchin outlined the benefits of such partnerships. “We’ll never be able to build all the potential devices out there between smart home and wearables, and automobiles,” he said. “We can’t do it alone. We look to the developer community to innovate on our behalf and innovate using Alexa.” (See also: Amazon Could Double In Next Three Years.)
