Why the Echo is a Strategic Product for Amazon

Over the weekend, I set up an Amazon Echo in my home to see what all the fuss is about.

I technically bought the Echo as part of our research on how voice and AI is being used in this type of application, I have been surprised by how useful it is out of the box. Normally when I buy something like this, my wife rolls her eyes and objects on the grounds we don’t need it. But even she has started to become a fan and uses it to put things on a shopping list which is, for her, a killer app since she often tells me she needs to buy something but never writes it down. Now she just tells Alexa (the word used to activate the Echo) to put it on her iPhone Echo app shopping list and it now can be used when she goes to the store. She also tells Alexa to set a timer when she is cooking and instantly it sets it and dings when the time is up. This is a killer app for me since food is never burned or overcooked anymore. She also likes asking what the weather is, what are the top news stories, and even what the road conditions are for her when she goes off on errands, to meet with friends or goes out to our grandkids’ house. She even uses it to call up her favorite songs, since it taps into Amazon’s Prime music service.

But with the Echo I think Amazon is on to something much bigger and is part of a broader strategic initiative. I believe Amazon’s longer term concept is to create a home server that can be accessed from any room to provide a larger spectrum of apps and services. Interestingly, there is an optional remote you can buy that you have in another room and use it to talk to the Echo server and get it to activate or respond to your request. But, in the future, it would make more sense for Amazon to create satellite boxes or “Little Echos” that could be placed in all the rooms of the house to interact with the main Echo Server. Imagine just walking into the house and saying “turn on the lights” or “turn the thermostat to 78 degrees” or “unlock the back doors”, etc. I believe the bigger vision is for the Echo to be the control point for eventual home automation and use “little Echos” placed throughout the house. All one needs to do is speak and, from anywhere you are in the house, an action takes place or the info your request is instantly spoken to you. I also think the Echo smartphone app will get smarter and let you do these commands when away from the house, especially one’s connected to appliances, thermostats, cameras, etc.

You can expect Amazon will try and get more light switches, door locks, appliances, etc, connected to the Echo and try and become the central control point for an eventual home information and automation system that uses one of the most natural forms of communications, the voice, to drive the UI. They will also make it much smarter and perhaps even open up the APIs so 3rd party software vendors could create apps for the Echo system. The key to this strategy is voice as a UI and, from an industry standpoint, this is significant. I believe voice will become a very important UI for man-to-machine controls. This is an important device that will flesh this out for consumers.

Ultimately, I think Amazon plans bigger for the Echo and could use this device as a sort of Trojan Horse to eventually deliver the future of voice-activated home automation, information and utilitarian productivity and shopping services.

More importantly, it is highly strategic to them. If someone can deliver a whole home voice-activated control server that can be expanded to deliver all types of home services and new apps, as well as use voice to eventually buy anything on command, it puts them in a unique position in the world of home automation. This is especially true considering their online store could eventually be integrated much deeper into Echo’s services. Today, you can only buy items you purchase often, but I suspect you could eventually do a voice search for a known product and have it be purchased on command.

There is much more to Echo than meets the eye even in this first generation and, if I were Apple, Google and Microsoft, I would keep a eye on this. Amazon could be showing us the future of the smart home and smart home services and show consumers the value of voice as a UI.