If you are a regular reader of the channels you will be well aware of the huge implications that the IoT is likely to have on the world in the coming years. Everything from improved safety on building sites through to tracking when a plane engine may need maintenance or doctors tracking the health of patients from hundreds of miles away. The possibilities of the IoT are almost endless, but we are still seeing an adoption, especially amongst consumers, that is slower than some have anticipated.
Amazon are one of the standout exceptions to this with the Echo, which had sold over 5 million in the two years until November 2016 and has reported that it sold 9 times more units this holiday season than in 2015. It is undoubtedly the jewel in the crown of the consumer IoT, the single most visible and acknowledged IoT product, combined with the voice recognition element which gives it another level of excitement.
However, in the spread of new technologies, they need to have a balance of different elements that many IoT devices often lack, but something that Amazon have managed to do in their Alexa app and Echo product range. Other tech companies need to take note, this is how to spread a new technology:
Developer And Partner Opportunities
As Apple found out a decade ago, the most important element of the iPhone was not necessarily the technology that came in the neatly designed phone, but in the applications that others could build for them. Alexa has used this same logic with its ‘skills’, where thousands of skills have been created for Alexa, including the ability to turn your smart lights on or off, book an Uber, decide your fate, play a role playing game or even have a personalized Jeopardy quiz. This has set apart the Echo, not as a standalone product, but as a platform upon which others can create things that people want, keeping it relevant and interesting.
There are also significant partners who have worked with Amazon to get their skills onto the platform. Companies like Fitbit, the Guardian, Uber, Just Eat, BMW, and Aviva have all jumped on board and have their own skills that integrate with existing accounts or APIs to allow their message and products to spread through this new format. Many of the skills actually supersede and challenge Amazon’s own offerings, i.e Big Sky, which tells users their localized weather, something also offered by Amazon’s native skill.
People have hundreds of different accounts that they use and new technologies can’t simply say ‘ours is better’, they need to give customers the option to use what they’re already comfortable with, which often requires ceding control of a certain aspect to a different company, knowing that they are ultimately using your own platform.
This kind of partnership is also what makes the IoT element of Alexa so impressive, given that they can partner with other successful IoT companies like Hive, Philips, Nest, and Belkin to link every connected element to a single central hub.
Early Adopters Are Not Losers
The technology adoption life cycle is an important concept to understand for companies releasing new products, but those early adopters often find it frustrating that those who adopt it later on in the cycle and hence did little to push the product in the first place, often get a better product than the one they originally purchased. However, Amazon have deliberately improved the Echo through its connected nature.
It means that anything a user can do on the latest generation can also be done on the first. This means that people aren’t necessarily waiting until the next device with all the new features comes out, because the chances are that it may look a little different, but ultimately has the exact same functionality. This means more sales today, which, in terms of gaining a foothold into the immature consumer IoT market, is essential
Google have now released their own version of the home assistant with the Google Home, but this is now some way behind Amazon, mainly because of how Google and Apple developed their respective products. Being developed on phones meant that the conversations and the way that people spoke to them was completely different to how people would actually speak in the home.
Few people would use Siri on their iPhones on public transport or when walking around the street, so trying to develop a system of voice activated dialogue is not going to be as effective as having something placed in the home, where people will be much happier to interact freely. How many people are going to ask their phone what’s on their shopping list in the middle of the street compared to asking an AI assistant in the kitchen?
Not placing Alexa on any technology that regularly leaves the home has meant that Amazon have managed to develop the product in the space where it will predominantly be used, creating a great user experience that is hard to get before it is put out into the real world and can learn from customers.
Low Price And International Reach
Amazon have had the Echo on the market for over 2 years at a price that few would describe as expensive, given that you can pick up the lower end Echo Dot for $50 and the most expensive model is still only $180. This has given them an advantage as people aren’t too worried about making an investment of that size and it not living up to their expectations, if it had been double that then it is likely to have put many people off making that initial leap.
It is the same policy they used with the Kindle and Fire Tablet, selling them considerably cheaper than rivals in the knowledge that they are likely to get the money back through the direct access to their site. People may not necessarily like it too much when they accidentally order something and need to cancel it, but ultimately it is this simplicity of ordering that has meant they have paid considerably less. To use Siri, the cheapest product available is the iPod Touch, which starts at $199 and lacks several features compared to Siri on the iPhone or iPad.
Google have adopted the same strategy, selling Google Home for $130, but given that Amazon already have a head start in this area they will need to do some serious catching up to get the same number sold any time soon.
Ultimately, getting these kinds of connected technologies into peoples homes is much like selling personal computers and the internet in the 90’s. People simply need to be sold on the benefits before they can fully adopt them. Much of this doesn’t come with clever advertising campaigns or preaching from some kind of high-tech ivory tower, it comes with getting technology into people’s homes. The Echo may not be the most powerful IoT device and in many ways falls behind the Google Home in terms of conversational interface, but ultimately the Echo is currently winning out thanks to clever business decisions.