Amazon won’t make massive amounts of money off of its new $60 Alexa-controlled microwave. Or the Alexa controlled wall clock that only sets timers. In fact, making a profit from its growing selection of Alexa and Echo devices may be beside the point.
The company is working toward something bigger and potentially more lucrative.
Amazon wants its Alexa voice assistant to be an inescapable, invisible presence that is always with us, like a perky shadow. And it is trying to accomplish that without the inescapable gadget we already take everywhere: our phones.
On Thursday, Amazon announced 13 new Echo and Echo-adjacent gadgets at a press event in Seattle. In addition to the clock and microwave, there were new Echo smart speakers, a device that puts Alexa in cars, and a dedicated DVR to compete with 2007’s hottest gadget, the TiVo.
“It’s absolutely not about the revenues or the gross margins that these devices create,” said Werner Goertz, an analyst at Gartner. “It is investment in the proliferation of Alexa. Proliferation creates an infrastructure.”
Amazon wants to draw users into its ecosystem, says Goertz. The real money will come when Alexa users buy products on Amazon.com, consume Amazon Prime content, and use Amazon Web Services.
Data is at the heart of this plan for voice domination. The major players all have their own data-collection strengths, said Julie Ask, an analyst at Forrester.
Google has information from your email, calendar and locations, while Apple knows everything you do with your smartphone. Amazon primarily knows what you buy and watch, but Alexa is changing that.
Imagine having regular conversations with your microwave. Information about what you eat and when could be worth more to Amazon than what you paid for the appliance.