Amazon: The Grand Food Fight Strategy
by Jean-Louis Gassée
Today, we’re not discussing Amazon’s efforts to sell more and better food. Instead, we’re looking at a barrage — sixteen products in one go — of mostly Alexa-centered products announced on September 25th. Amazon wants Alexa everywhere: In the home, on the road, and walking down the street.
My Apple days allowed me to discover and love Japan. On our business trips, we were led by John P. Moon, Apple’s VP in charge of peripheral products (displays, printers, storage), a man whose deep and loving knowledge of Japanese culture opened hearts, minds, and the doors to design and manufacturing partners such as Sony, Canon, Alpine, Tokyo Electric, Matsushita, and others. No visit was complete without a trip to Tokyo’s Akihabara, the electronics design and retail center-on-steroids that sported innumerable and sometimes incomprehensible variations of the same product idea — cordless phones, clock radios, pocket TVs (this was the 1980’s). We called this exuberant chaos The Japanese Food Fight Strategy: Throw everything at the wall and see what sticks.
The food fight metaphor comes to mind when we look at the barrage of products Amazon threw at the marketplace during its September 25th event. Alone on stage for a 90 minute presentation, Sr VP of Devices and Services David Limp, a man who cut his teeth during frustrating times at Palm, took us through no fewer than 16 new and improved Amazon products.
Charitably, Geekwire has condensed the hour and a half show into a four minute YouTube video. In a more leisurely fashion, Tom’s Guide, a respected technophile site, provides a list of (almost) all of the announcements…
… followed by a minute by minute blog of the event. For a more official report, we can also turn to Amazon’s home organ, the Day One blog.
This is a very broad array of products that range from cameras to Ring home security devices, Wifi beacons, a Fetch dog-tracking gizmo (not mentioned in the list above), and a wealth of Alexa-enabled devices: Iterations of existing Echo speakers extended to both low and high ends, an add-on unit for (some) GM cars, a four-function oven, Echo earbuds and, more perplexingly, Alexa-connected finger rings and eyeglass frames.
The intent is clear: Amazon wants to saturate our homes and our lives with Alexa devices. As Limp explains in a CNBC interview, these products aren’t meant to make money by themselves, but to lubricate Amazon’s Everything Store money pump, to facilitate more purchases [as always, edits and emphasis mine]:
“Amazon Senior Vice President Dave Limp told CNBC’s Deirdre Bosa that the company does not look at the products as a profit center, but as a long-term way to keep customers in the Amazon ecosystem, buying products.”
What Limp doesn’t dwell on is how Amazon will follow us around our houses — and outside as we wear Alexa rings and eyeglass frames — and collect behavior data that will help refine suggestions and even adjust prices to our individual profiles. To the contrary, the September presentation contains Amazon’s persphinctery genuflection to privacy:
When asked if the high-end but inexpensive ($199) Amazon Studio has an unfair advantage over the Alexa-inoculated Sonos One speaker (also $199) from partner Sonos, Amazon gives us the same tired answer we hear from every big tech company that competes with its partners: “More choices for our customers”. (Just in case you wonder about my prejudices, I’m a Jeff Bezos fan, as expressed in a Monday Note titled Bezos: A CEO Who Can Write, a post that still ranks #1 in number of comments.)
Some of the new products will fail but, in Amazon’s philosophy, failure is a good thing…as long as it’s a “failure at scale”, as opposed to small, wishy-washy failures. As explained in Bezos’ 2018 letter to shareholders, failure at scale means you’ve done your best and can reap useful lessons from the experiment. Recall the failure of the recently retired Dash buttons affixed to washing machines and pantry doors, now replaced by the much more ubiquitous and flexible voice assistant: ‘Alexa, get us more laundry detergent’… or diapers, or paper towels.
But have these courageous, fully-willed failures led Amazon to the right lessons? In terms of failure at scale, none was as striking as Amazon’s 2014 Fire Phone that resulted in a $170M write-down black eye. A key reason for the failure was Amazon’s refusal to adopt a standard version of Android, going instead for a custom, incompatible “forked” version. One can’t help wonder what Bezos thinks when seeing Microsoft’s adoption of Android for its Duo notebook/phone coming in about a year.
And what lesson led Amazon to introduce the Loop, a ring endowed with an Alexa connection? In a marketplace saturated with smartphones, why wear such an awkward-looking ring, talk to your hand and bring it to your ear for an answer…assuming the battery for such a small device hasn’t died. Amazon’s own description of the device sounds embarrassed:
“Simply press a button [and] talk softly to Alexa and then the answer comes discretely through a small speaker built into the ring.”
Besides smartphones, we also have a growing population of app-enabled smartwatches capable today of doing the job of the invitation only Amazon Loop ring. I just looked at the Apple Watch app store and haven’t found a single Alexa or Amazon app…
Amazon also announced Echo eyeglass frames, which are also available by invitation only. Again, one wonders about the “smart frames” raison d’être in a world of smart phones and watches.
All of which makes me ask why Amazon doesn’t get back in the phone business. Why not an Android-based Echo phone with an Amazon Interface layer similar to what Samsung does for its Galaxy phones with its One UI? The company already sells many such devices, including the Jitterbug brand of flip phones for seniors.
There’s no doubt that Amazon wants to keep Google’s claws off their business, but the lesson that the company should have learned from the Fire Phone is that by religiously shunning Android, they lost the currency provided by Google Mobile Services. Certainly, getting into the Android world could push Amazon into a profitless race to the bottom, but as David Limp says, “the company does not look at the products as a profit center, but as a long-term way to keep customers in the Amazon ecosystem, buying products.”
An Amazon phone could also help with Alexa’s “skills” by providing a handy, intuitive interface to a catalog of trigger phrases. There are already hundreds of skills; the list is updated every week in an email discussing new orders, phrases that Alexa has learned to understand. But how a user discovers these skills and keeps track of the phrases is a serious limitation.
Perhaps Amazon is planning to overcome this limitation through broader and deeper machine intelligence that can interpret poorly phrased requests. This a bet that Bezos’ company is capable of making, but whether it will succeed — and when…before Google or Apple? — is another story. In the meantime, smartphones and watches will continue to proliferate and gain their own sets of language skills.
— JLG@mondaynote.com
