This year’s annual CES conference was especially exciting for me because it was the first time I attended as an investor. With so many ideas on display, identifying trends with the most potential for growth and what might be the “next best thing” is usually akin to finding a needle in a haystack, but this year, one product stood out for me from all the rest: Alexa, Amazon’s voice based home operating system. Already a clear leader in smart home innovation, its platform has inspired an entire ecosystem of devices and services around it which is essentially strengthening Amazon’s stronghold in this area even more. But it has also created some interesting opportunities for further innovation by other IoT companies and entrepreneurs in Personal Voice Computing, and I’d like to share some of those today.
So far, the smart home’s initial allure hasn’t quite lived up to its promise, but Alexa seems to be in the right direction. Thanks to Alexa, voice activated homes no longer seem like a distant, unattainable goal, and many companies are taking notice.
With Alexa, Amazon is essentially paving the way for a new model of communication. It is a centralized, discrete device controller that allows for continuously present, hands-and-eyes free, seamless and interactive voice communication that has the potential to become more sophisticated and reliable with time.
Just like a classic OS, Alexa is a hybrid piece of software that manages computer resources and provides common services through a consistent set of interfaces. In the same way that Android is considered to be an OS designed primarily for touchscreen mobile devices, Alexa is considered the OS designed primarily for voice controlled screenless home devices. And just as Google used Nexus to demonstrate what Android was capable of, Amazon introduced Echo to demonstrate what Alexa could do. By introducing Alexa in this way, Amazon opened the door to any third-party devices, from cars to laundry machines, that are interested in integrating Alexa into their hardware.
With approximately 1000 controllable devices exhibited at the most recent CES, it’s clear that many other leading manufacturers are already on board.
Not only has Amazon opened the door for the manufacturers of new devices, but early on, third party developers were incentivized by the company to create new capabilities called “skills” for these devices. As a result, more developers are creating more software applications, leading to an increase in the addressable market and so on. To date there are more than 9,000 skills available for users to take advantage of; a clear sign of the network effect any leading OS strives to set in motion. Looking forward, Amazon hopes AI will customize skills in real time, taking the humanized UI to a completely new level. Amazon will essentially maintain the direct interface with the end users, and thereby own the user relationship which is extremely valuable in promoting its interests over the entire ecosystem.
As one would expect from any groundbreaking OS, since its introduction into the mainstream market we have seen a rise in the interest of competing hardware providers to stay relevant by offering more features and improved specifications. Eventually, the devices will be commoditized, allowing the OS to become the most profitable component in the value chain.
It seems inevitable that voice-recognition will become a standard for most products as advancements in artificial intelligence continue to be made. By understanding what we say and, more importantly, what we mean, this technology will further remove barriers of human-to-computer interaction.
The trend is to make the way we communicate with our machines as natural and intuitive as possible, and what better way to do so than to make use of the most basic human communication tool: Speech. Companies that are quick to recognize unique ways to leverage this new voice computing technology will be rewarded not only with financial success but with the ability to contribute to a fundamental change in the way we live.
Opportunities for innovation in Personal Voice Computing
Whether you’re an entrepreneur who thrives on the business of consumer technology or a product manager looking to identify the most promising next-generation innovations, the growing popularity of voice-activated devices is creating some noteworthy opportunities in the Personal Voice Computing space:
1) From non-listening to listening devices
With the Alexa Voice Service developer program, Amazon is motivating everyone from small startups to large manufacturers to build their own Alexa device. For the everyday consumer, this means that potentially all devices that are currently non-listening can be upgraded to listening devices and integrated into the smart home ecosystem.
The kitchen is one of many places Alexa is showcasing its utility. With useful features such as maintaining grocery lists, converting units of measurement and looking up recipes with the ingredients you already have at your disposal, manufacturers are quickly recognizing the potential for integrating Alexa into their appliances. Among the long list of appliances that are already compatible with Alexa are LG’s Smart InstaView™ refrigerator, Whirlpool laundry machines and Samsung’s robot vacuum cleaner. Amazon’s interest in capitalizing on Alexa’s smart-home capabilities has led them to make it easier for companies to create compatible devices. We can therefore expect many more companies to announce their Alexa integration in the near future.
2) Ultra Mobile convenience
The introduction of Alexa into everyday life is accompanied by a shift from the common use of apps to the integration of new skills into Alexa’s virtual library. Amazon’s ASR and NLP cancel out the need to pull out your phone, unlock it, open an app, search for something and finally call or message someone in order to take action. You simply state what it is that you need and it is taken care of with minimum effort and maximum effect. From now on, ordering food is as easy as simply saying out loud: “Please order Thai food from…” or “Please check for the cheapest flights to London for this coming Sunday morning”. As AI capabilities improve, this bidirectional quality will create an opening for a wide range of services.
3) Connecting environments rather than people
Placing a voice computing device in a specific location adds a layer of low friction connectivity between the visitor and the location, opening a range of services associated with the specific location. During the last CES, Wynn Las Vegas placed an Amazon Echo in every hotel room – an astounding 4748 devices in total – allowing guests to dim room lights, close the curtains, control room temperature and the television using voice commands. Moving forward, it could easily add “concierge”, front desk, Yelp features and more.
Another appealing application of this utility could be in the restaurant environment; one could, for example, ask for the “soup of the day”, another glass of water or even pay the check – with no hassle or unwanted delay. Once such a platform is commonly integrated into a specific location, new apps will flow in and add layers of functionality resulting in the accessibility to services that were never available before.
4) The emergence of “native” voice-first apps
Before Uber could ever be conceived (let alone created), a series of enabling technologies had to first fall into place. It wasn’t until the smartphone – a personal communication device that transmits location in real time – became a must have item for every driver and passenger, that a service such as Uber could be introduced to the market. In much the same way, the new era of voice personal computing is creating a wealth of opportunities for completely new “skills” to emerge. These skills make use of a virtual entity that is connected to an AI cloud “brain” which is capable of converting a person’s voice into a recognizable data pattern from anywhere, anytime, while connected to a plethora of functional devices.
I believe this area of voice personal computing has the biggest potential for growth and requires the most creative, out of the box thinking. Instead of adapting applications from one platform to another, innovation in this space should be geared towards the voice computing platform rather than older models that will soon be obsolete.
5) Real-time, personalized experiences
The presence of an always listening, speaker-agnostic, bidirectional audio channel that is constantly available wherever you go, opens the door for a whole new level of vertical services. Furthermore, a virtual entity that is continuously connected to one’s personal data flow, obtains prior data knowledge and is capable of on-demand voice interaction, may lead to significant changes in user behavior.
The wellbeing domain is a good example of this type of innovation. With Fitbit, for example, Alexa has access to the user’s daily activity and can answer any question that will help the individual meet his or her fitness goals. With this in mind, there’s no reason not to connect other activity details such as food intake, sleep quality, stress level, training data and more, to build a complete physiological stereotype and real-time data that serves to improve the life quality of the user. Leveraging this platform opens endless opportunities that can pop-up in real time and proactively offer suggestions that are not only based on a person’s individual profile, but more importantly, on specific scenarios, resulting in an AI companion that acts like a dietitian, fitness trainer and therapist – all in one. Alexa, Cortana or any other friendly TTS names could instantaneously recommend what to eat, guide a fitness training session, announce when it’s time to sleep, wake, rest or even drink a glass of water.
In our busy and densely packed lives what we need is an all-encompassing service that enhances productivity and efficiency and can be accessed from anywhere at any time.
No matter who becomes the most popular conversational partner, Amazon’s Alexa, Apple’s Siri, Microsoft’s Cortana, Google’s Assistant or perhaps Samsung’s Viv, the potential for innovators to create skills to support, enhance and take advantage of the wide range of exciting possibilities these platforms provide, is tremendous.
Those interested in climbing on board this trend would be wise to consider Voice UI computing in the context of the single-purpose devices around us and the places we visit. The focus should be on creating opportunities that the current mobile platforms cannot support, and designing for items that complement each other, leading to a harmonious personal device ecosystem.
The main obstacle towards achieving a holistic home operating system is the technological fragmentation that can occur within networks, protocols and devices that create inter-operability problems. However, we are seeing more and more devices bypassing this problem by becoming “dumb”, as they transform into straightforward access points for the cloud and no longer need to communicate with each other. From this point on, Alexa will be relied on to control all the elements, and it’s more than capable of stepping up to the task, leading the way for systems to become far greater than the sum of their parts.
Today the U.S. smart home market is in the crucial stage between early-adopter and mass market phase with millions of American households already using an Alexa-powered device. The major challenge will be anticipating when voice interface will finally creep into the mainstream, and predicting the power-curve adoption of the winning Home OS.
Amazon has mastered the art of voice based UI so cleverly, it promises to make Alexa an indispensable part of everyday life for just about everyone, no matter how tech savvy they are (or aren’t). Investing in Alexa is therefore not only an investment in the diverse technological conveniences its platform can give rise to, it’s also an investment in what I believe will be the next biggest cultural phenomenon since the introduction of smartphones.