Editors' pick: Originally published March 3.
As much as Amazon's (AMZN) Echo home speaker/voice assistant has turned into a surprise hit and yielded a blizzard of positive media attention, the Alexa voice assistant powering Echo hardware is still in key respects at a strategic disadvantage relative to Alphabet/Google (GOOGL) , Apple (AAPL) , and Microsoft's (MSFT) rival offerings.
Google and Apple's assistants each shipped with hundreds of millions of mobile devices last year, and Microsoft's perhaps on close to 200 million PCs. By contrast, Echo sales (judging by estimates) were likely only in seven figures.
In theory, that would leave Google/Apple much better-positioned to create powerful third-party ecosystems for their assistants, as well as to optimize them in response to user voice commands. In practice, Amazon's all-out push to both improve Alexa and place it within as many devices as possible is making for a very interesting battle.
Earlier this week, Lenovo's Motorola Mobility unit announced it plans to bundle Alexa with "most" of its phones going forward. Since then, Re/code has reported Amazon plans to launch one or two Alexa devices this year that will "allow people to initiate phone calls by voice," as well as let multiple devices function as a home or office's intercom system. And Amazon hardware news site AFTVnews has come across an image on Amazon's site that suggests the company plans to launch a home security camera with Alexa built in.
All of this comes less than two months after dozens of Alexa-powered devices were shown off at CES by companies not named Amazon. These included Alexa-powered speakers, robots, refrigerators, TV sets and alarm clocks, as well as a Huawei Android phone. In addition, dozens of home electronics and appliance makers announced that their latest products can be controlled via Alexa.
That last fact underscores how successful Amazon has been at creating a giant hardware, app and Internet service ecosystem for Alexa. At CES, Amazon announced Alexa now supports over 7,000 third-party "skills," up from just 1,000 last June. They cover everything from playing games to ordering Uber rides and Domino's pizzas to controlling home lights and thermostats to hearing sports scores and news stories.
Google and Apple have taken a slower approach to building out their voice assistant ecosystems. Some Android developers have taken advantage of Google's Voice Interactions API, which launched in 2015 and lets users issue voice commands for third-party Android apps. And in December, Google Assistant, the next-gen service that evolved from the older Google Now, was opened up to developers. But currently, developers can only support interactions with the Google Home speaker. Android phone support will arrive later.
Apple finally opened up Siri to developers last June, after having previously integrated the assistant with a handful of third-party apps. But for now, only six types of apps -- calling, messaging, payments, photo, workout and ride-hailing apps -- are supported. Apple has also seen a measure of adoption for its HomeKit platform, which launched in 2014 and allows smart home devices to be controlled via Siri commands.
However, launches of Alexa-capable smart home products have been outpacing those of HomeKit-capable products, thanks in no small part to the fact that Apple places much stricter requirements on hardware partners than does Amazon.
Amazon, meanwhile, seems intent on spending and partnering its way to success. Last May, Jeff Bezos said Amazon had over 1,000 people working on Alexa and the Echo line. A LinkedIn job search for "Amazon Alexa" currently turns up 896 openings at Amazon and a pair of subsidiaries. A search for "Amazon artificial intelligence" turns up 157 openings at the company, including many for Alexa units.
That said, Google still appears to be a very formidable rival. In addition to being able to bundle Assistant with the world's most popular mobile operating system, the company's ability to integrate Assistant with Google Search and its massive Knowledge Graph, as well as with other Google services such as Maps and Gmail, is a valuable advantage. So are its tremendous AI investments, which help with things like maintaining a conversation with a user and understanding the meaning of natural-language commands.
Apple, on the other hand, might be in a tougher spot. While Siri is guaranteed to maintain a large user base as long as it remains built into Apple hardware, even many Apple fans have been complaining it has been falling behind its rivals in both accuracy and functionality. And unlike Alexa or Google Assistant, it's unlikely that Siri will be baked into third-party smart home devices, given Apple's product philosophy.
The stakes in this battle are pretty high, as more and more consumers warm to voice as a computing interface. Though they'll never fully replace the use of touchscreens, keyboards and mice, the enhancements (via AI algorithms and other means) made to voice search and assistant platforms as they take in more user data, along with their growing usefulness as more products and services join an ecosystem, is clearly producing a sea change. In May, Google disclosed a fifth of all the searches it handled via its mobile app and Android devices involved voice.
For Google, the rise of voice presents some monetization challenges, since it can lower the number of times a user making a query sees the text-based search ads that remain by far Google's biggest profit engine. But the company is clearly better off embracing the trend with a service that integrates Google Search -- and in many cases turns up a search results page to go with a voice reply -- rather than ceding the space to rival services. Google, for its part, argues that a lot of voice search activity complements rather than cannibalizes text-based searches, and thus expands its addressable market.
Amazon, meanwhile, benefits from Alexa's growing popularity both via hardware sales and the integration of its e-commerce and digital content services with the platform. Indeed, it might be a little too easy to place an Amazon order via Alexa.
In addition, Amazon Web Services (AWS) powers many third-party Alexa Skills through its AWS Lambda service, though it's also possible for developers to use another cloud provider.
Given what we've seen over the first couple months of the year, it's likely many more home and mobile devices featuring Alexa will be unveiled over the next 10. It's also likely that makers of smart home products will start to treat Alexa integration as no-brainer, and that the number of total skills supported by the platform will surge past 10,000.This is a battle where Amazon, ironically, has been more of a plucky upstart than an entrenched giant. But it can no longer be considered much of an underdog.