Amazon’s Device Strategy
Amazon is following Apple and Google into the connected home, but with slightly different motivations. While they are both looking to connect and manage their devices, Amazon is more focused on tying users into the Amazon experience and capturing data about their lives. Their latest device is the Amazon Echo, which resembles a Siri-like personal assistant. In other words, they are trying to make their products seem like part of the Amazon family, rather than just another gimmick.
While Apple picks well-designed products, Amazon throws electronics against the wall. While Apple’s strategy is to sell every product as quickly as possible, Amazon has had few success stories. Its Alexa-powered microwave is one such example, but the company doesn’t usually launch these products immediately. Instead, it monetizes its low-margin device sales through higher-margin ecosystem-driven transactions. But is this strategy the best approach for Amazon?
Despite the success of its Kindle, Amazon’s tablet strategy hasn’t been as successful. It has pushed its App Store globally, and the company has also sold tablets at cost. Amazon doesn’t care about making a profit on its tablets and does not want people to upgrade every year. Rather, they are looking at the content they sell through their devices. However, their strategy is risky. The long-term outlook for the company’s tablet sales is unclear.
As it stands, Amazon is putting Alexa into more places than ever. The company’s goal is to make Alexa everywhere, and it’s not limited to just the Echo. The company is also looking to integrate its voice assistant with other services, including Android and iOS. In CES, the company announced new form factors for the Echo. Those products were expected to integrate Alexa with the Echo. However, despite the fact that the Echo will become a major part of the home, Amazon will continue to work on this strategy.