Tencent Technologies News, according to foreign media reports, Amazon has found a huge audience for its Echos product portfolio, which makes the company a clear early leader in the emerging voice assistant field. But some investors and analysts are questioning Alexa's development strategy and whether there will be a profitable business model for these devices and infrastructure technologies.
An astonishing number of Alexa devices
After the initial success of the Echo smart speaker, Amazon launched an astonishing number of new products based on Alexa voice assistants to apply its devices to more living rooms and kitchens.
This week, the company released more than a dozen new voice-controlled products, including wireless headphones and smart glasses that can communicate with Alexa.
After last Christmas, Amazon said it had sold more than 100 million Alexa voice assistant-driven devices. Shortly after that, a report by Consumer Intelligence Research Partners said Amazon controlled 70% of the smart speaker Market in the United States. Unlike Apple, which had a 6% market share at the time, Amazon's goal was not to make money from selling devices, but to see it as a means of attracting users to the Amazon ecosystem, where consumers might consume in other ways.
This helps explain why you can buy small Echo Dot smart speakers for $50, many Amazon products for less than $100, and Apple's HomePod smart speakers driven by Siri voice assistants for $300. Amazon's devices have been the best-selling electronics category on its website, but the company did not say how much revenue they generated.
Dave Lip (Dave Limp), head of Amazon's hardware business, said in an interview on Wednesday that the company's goal was to
So far, Murphy said, this approach has been
Application Store Model
Ben Schacht (Ben Schachter), an analyst at (Macquarie Research), a Macquarie research firm, said Amazon's long-term focus could be on building an app store model in which Amazon would take a slice of each transaction. Alexa's app store, known as Skills, includes more than 100000 services, such as meditation guides, oral quizzes, fitness services and comedy shows for third-party developers.
Shakht did not estimate how big the Skills business would eventually become, but he pointed out that the traditional application market was more than $100 billion globally.
In a statement, Amazon said,
Currently, the company is focusing on making Alexa more ubiquitous. In addition to this week's wireless headphones and smart glasses, Amazon also showed off a ring that can talk to Alexa and announced a partnership with General Motors to extend its voice assistants to millions of General Motors vehicles.
Tom Forte of D. A. Davidson, an investment firm, is one of the most bullish analysts on Amazon. He says the market still greatly underestimates Alexa's potential. He says it has become the leading voice technology for networked devices, and shopping from these devices is still at a very early stage.
Amazon has a large number of very tolerant investors who have long accepted the fact that profit margins are low. Despite Amazon's lucrative and fast-growing online services division, the company's operating profit margin in the last quarter was less than 5%, compared with 24% and 21% for Alphabet and Apple, respectively.