The latest feature of Amazon.com, Inc.'s Alexa could dent Apple Inc in the future.
Seattle, Washington-based Amazon.com, Inc. (NASDAQ:AMZN) has been at the forefront of technological innovation in the last decade and continues to do so now. The retail giant has spread its presence in every other space where they can innovate and is already giving other established tech behemoths a run for their money. In our previous Amazon coverage, we highlighted how Amazon is becoming a threat to Alphabet Inc. (NASDAQ:GOOGL). Amazon's latest innovation, its voice assistant Alexa, has taken center stage in 2017 and was one of the stars of the CES 2017 held in January. Alexa could be the next growth driver for AMZN stock and the latest developments suggest Amazon is going all out to make Alexa, the new 'AWS' for itself. Now, Amazon is planning to launch Alexa powered devices with phone call functionality, this in a way could spell trouble for Apple (NASDAQ:AAPL). Let's take a closer look.
Alexa Just Keeps Getting Better.
A Recode post reports that multiple sources suggest that Amazon is planning to release new Alexa-powered devices with the phone call and intercom functionality. An official announcement may come out in the next few months. WSJ reports that initially both Amazon and Google had planned to launch this specific feature on their respective home speaker devices. But there have been certain privacy issues which have created reservations over the launch of this feature on a full scale. However, reports suggest Amazon is going ahead with the launch of this feature. In addition to this, Alexa is now being pitched as a true office assistant. A TechRepublic post highlights how Alexa's latest new skills could make it useful to businesses. Alexa's latest skill addition includes support for Office 365 calendars which make it more useful to businesses that use Office 365. Also, there are reports of Amazon working on an indoor video camera, which could be either for home security or video conferencing. This combined with Alexa-powered devices with the phone call functionality could be more than decent options for conferences and offices. The above TechRepublic post states that some corporates like Oracle and Box already use "Alexa in their offices to enable conference rooms check in."
Why Should Apple Worry Over These Developments?
A recent ZDNet post describes the possibility of Amazon Fire range of tablets being retrofitted with Alexa voice assistant which spell trouble for Apple's dwindling iPad sales. The Alexa-powered devices, with the speculated phone call and intercom functionality, add more weight to his argument. Tim Cook claims to be very bullish about the future of iPad but we have not seen any developments on the iPad front and iPad sales are in a free-fall. The author of the ZDNet post uses this argument to drive home the point of 'how Amazon could come up with something that could spell more bad news for the iPad'. To quote the author on this: "If Amazon can pull the Fire tablets and Echo devices together to create a communications platform along the lines of FaceTime or Skype, and continue to keep the pressure on Apple on both the price and Alexa features front, then this could very well be the end of the iPad." The author also counters the argument of pro/creative/enterprise market still saving the iPad in his post. He opines that "Apple keeps dabbling in these markets, but all signs point to Apple slowly retreating from anything that isn't mass market and ultimately aimed at consumers. It keeps dumbing down its pro software (think Final Cut Pro). It is letting its high-end Mac Pro workstation wither and die from a lack of attention, and its forays into pro markets haven't really paid off with the iPad."
The ZDNet author also highlights that the iPad sales could be in for a further rough time with the latest Alexa moves. One more area where Apple needs to worry about Amazon's Alexa is in the voice assistant space. Apple's Siri has the numerical advantage of being on more number of devices but Amazon's Alexa is far superior. Amazon has been very successful in creating a giant hardware, app and Internet service ecosystem for Alexa. A post on The Street points out that Alexa-capable smart home products have been outpacing "the devices based on Apple's HomeKit platform, which was launched in 2014 and allows smart home devices to be controlled via Siri commands." The post also highlights that even many Apple fans have been complaining that Siri "has been falling behind its rivals in both accuracy and functionality." The rise of voice provides a very broad monetization opportunity which is further expected to grow bigger going ahead and Apple seems to be lagging behind the competition.
Alexa Could Be The Next AWS For AMZN Stock.
Amazon.com, Inc. made a great start to the year with its Alexa road show at CES 2017. AMZN stock had a blip after delivering mixed Q4 earnings but it has bounced back from that to trade near its all-time highs. AMZN stock has YTD gains of 12.9% already. Alexa is set to drive AMZN stock in the future. Amazon is pulling out all the stops to make Alexa a winner in the voice assistant space. As a 'The Street' post highlights, Jeff Bezos confirmed, last May, that more than 1000 people are working on Alexa and they are still aggressive to add more people to it. A LinkedIn job search for Amazon Alexa and its subsidiaries still throws up more than 1000 opportunities. Alexa has also found its way into Google's popular mobile OS Android through partnerships with Huawei and Lenovo as a voice assistant on their phones. This is really a good start for Alexa to come to Android devices in spite of Google promoting its own voice assistant. To add to that, Amazon Web Services (AWS) powers many third-party Alexa skills through its AWS Lambda service, though it's also possible for developers to use other cloud providers. All these are only an indication of things to come and we could see more Alexa powered devices and use cases going ahead. Alexa could keep driving AMZN stock higher and AMZN stock still remains a good long-term buy.
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