Digital assistants – Man and dog

Reply to this post

Late-comers have very little chance

• The latest craze to hit the mobile industry is digital assistants where every man and his dog is now building one to try and drive engagement through the ecosystem.
• LINE is the latest entrant with its offering called Clova but just like everyone else, LINE is going to find that digital assistants are fiendishly difficult because they require top notch artificial intelligence to power them.
• To make life even more difficult, digital assistants suffer from a chicken and egg problem (see here) where they need usage to improve because its with usage data that they can improve.
• The problem is that no one will use them if they are not already very good meaning they will be unable to gather the data they need to get to level of quality where users will engage with them.
• LINE is an instant messaging company that has done an excellent job of monetising messaging through the sale of stickers and games but needs to find other avenues to keep its growth growing.
• The problem is that when I look at LINE, I see no AI competence to speak nor do I see any history of it working on AI.
• The search engines are the leaders in AI, but they are not the leaders because they are the cleverest.
• They are the leaders because they have doing it the longest.
• This is why RFM thinks that Google Assistant and Baidu Duer are miles ahead of everything else that is being offered including Alexa, Siri and Cortana.
• Now that Google Assistant is being rolled out onto every Android phone that has Marshmallow, Nougat and above, I think many of the others have very little chance at all.
• Siri will continue to live on iOS devices but the real battle will be between Google and Amazon for the home speaker.
• Here Google has a vastly superior product but Alexa is much better at controlling the smart home, albeit with an awful user experience.
• This is because Amazon has done a great job at getting smart home developers on board whereas Google has been very late in even making the API available.
• RFM estimates that Amazon has around 8m Alexa enabled devices in the hands of users whereas Google has just over 0.5m.
• Consequently, Google is at risk of losing (see here) to Amazon but I think the shock of seeing itself wiped out at CES has shaken it from its stupor.
• Consequently, I think that LINE, Huawei, Samsung Viv, JD.com Ding Dong, SK Tel Ding Dong, Sony and so on have very little chance and would be best served by doing a deal with one of strong ones rather than wasting shareholder’s money.