Amazon – Hardware bonanza

New clothes do not make Alexa any better.

• Amazon launched a plethora of devices that aim to strengthen its grip on the smart home, home and small office security, wellness and reading/note taking but there is no sign of Alexa getting any cleverer which at the end of the day is what Amazon really needs.
• Amazon held its annual device event where much of its product line received incremental updates but there were a few forays into new territory.
  • First, the Kindle scribe: which is a 10.3” e-paper device with a front light for nighttime reading but for the first time also allows note taking.
  • This has been primarily designed for annotation of reading materials, but it can also be used for taking notes during meetings.
  • To make this really good, it needs to support handwriting recognition combined with the ability to search notes but whether this has been included is unclear at this time.
  • I suspect that it is these features that will decide if it is a big success and therefore the outlook for this device is pretty uncertain.
  • Second, Halo rise: which is a bedside light, a sunrise clock, a smart speaker and a sleep tracker.
  • The sleep tracking functions via the use of a sensor that detects movement and respiration from which it can deduce sleep patterns.
  • In reality, this is only half of the story because a good night’s sleep is also about heart rate which is supported by all of the wearable sleep trackers.
  • Hence, this is not going to give very good sleep data but for the casual user who knocked over and broke his bedside light recently, this could be a useful replacement.
  • Third, Eero: which is the mesh WiFi company that Amazon purchased some years ago.
  • This is being extended into small businesses with the launch of a power-over-ethernet version as well as a gateway that is typically used by companies.
  • For consumer, Eero will now be implemented in the Echo Dot product meaning extra base stations for mesh WiFi being added at almost no extra cost to the Echo Dot user.
  • I expect Amazon to keep pushing in this area as it provides the backbone for all of its smart home devices to work better both individually and together.
  • Fourth, TV: On top of a new and improved Fire Cube, Amazon has also launched an OLED TV at 65” and 75” screen sizes to widen out its TV Omni line of products.
  • These support all of the latest standards such as HDR10 and Dolby Vision and come at pretty reasonable price points.
• The Ring security system also received a series of new products that improve motion detection and lighting which can now be integrated with Astro which can be dispatched to investigate and film any disturbances.
• The new devices deepen Amazon’s grip on the smart home but the real thing that is missing in this whole lineup is intelligence.
• The smart home strategy started with the Alexa smart speaker and many of the subsequent devices have it integrated meaning that in an Amazon devotee’s house the assistant is everywhere.
• The problem is that Alexa remains as stupid as ever (as does everyone else) because the AI that underpins these digital assistants is not well suited to the use case of conversing with humans.
• If Amazon really wants to take its smart home to the next level, this is what needs to be fixed, but unfortunately, I suspect that Amazon is incapable of managing this.
• This is because, Amazon is not really an AI company and, in RFM’s assessments, it still lags almost all of its digital assistant competitors and I see no signs of this changing any time soon.
• Alexa is used to play music, set timers and turn the lights on and off and even with these simple tasks, it often struggles often meaning that it is easier and quicker to get up and turn the lights on by hand.
• Hence, I suspect that Amazon will have to continue throwing mud at the walls with ever more esoteric use cases to see which devices users like and which they do not.
• Amazon has a strong grip on the smart home as Google’s challenge has fallen badly by the wayside, meaning that there is no immediate threat but to really bring this segment back into focus, the digital assistants need to get a lot smarter.
• Amazon’s valuation is slowly winding its way down towards something that I would consider reasonable, but it still has a long way before I would be willing to bite.