Is the voice assistant good? Good, but not good enough

Translator | Bugatti

Reviewer | Qianshan

Recently, the US "Business Insider" magazine reported that Amazon's voice assistant Alexa and smart speaker business will lose $10 billion. The news comes as Alexa's competitors are also facing their own difficulties and trying to find ways to make their voice assistants profitable.

The current state of Alexa and other voice assistants reminds us that there is a gap between developing great technology and making money based on it. Tech companies are busy laying off workers in preparation for the coming recession, and new but unprofitable technologies will have to find ways to demonstrate their value or be eliminated by businesses in order to survive.

Eight years after the launch of Amazon Alexa, we can learn the following things from the voice assistant technology and this business.

1. Technology is good, but not good enough

Many innovations have enabled voice assistants like Amazon Alexa to do more than a decade ago Mission impossible. Advances in automatic speech recognition help assistants pick up and analyze a user's voice under different background noise conditions, in the face of other interfering sounds and the user's different accents. A natural language processing system based on deep neural networks such as Transformer, RNN, and LSTM helps the assistant match slightly different voices with corresponding commands. Imagine all the different ways you can ask about the weather or request timing. There are now many application platforms and APIs that allow voice assistants to traverse large amounts of information on the web and map voice commands to application functionality.

However, today’s voice assistants have limited capabilities. Generally speaking, Amazon Alexa can only perform simple tasks, such as setting a timer, playing music, checking the weather, and searching for simple information on the Internet.

These tasks are either so narrow that there isn’t much room for error, or they are so insensitive that even if the assistant makes a mistake it won’t cause much harm.

Voice assistants become unreliable once you want to perform tasks that are sensitive, require multiple interactions, or are multimodal in nature. Take shopping as an example. This is one of the important uses Amazon originally planned for Alexa. This is a sensitive task because it involves money, and users want as few errors as possible. This is also a complex task as it often requires multiple steps and the user wants to see the product purchased and wants to be able to browse purchase suggestions and alternatives. This is difficult to achieve with a voice-only interface, as is other tasks such as scheduling meetings.

2. Why do people pay?

#You've built a cool voice assistant that can perform a range of tasks quite accurately that other assistants can't. How to make it profitable? Given current applications, there are several solutions.

The first solution is to sell hardware, such as different versions of Amazon Echo, Apple HomePod or Google Nest smart speakers. In this case, the commercial value will be tied to the price of the device, the number of devices sold, and how often customers replace the device. This approach works for smartphones, since people spend hundreds of dollars every few years to upgrade their iPhone or Pixel phones, but it doesn't work for smart speakers. First, people are unwilling to pay a high premium for it because they don't use the device often. Secondly, there isn’t much to upgrade about a smart speaker; it’s basically just a microphone and a speaker, and sometimes a screen. Therefore, customers have no reason to replace them regularly. Finally, there are fees for upgrading and maintaining cloud services that support voice assistants. Therefore, roughly speaking, continued use of smart speakers will increase the costs for smart speaker manufacturers, and eventually these costs will exceed the profits from selling the speakers.

The second solution is to sell services. In this case, users pay a monthly or annual fee to use a voice assistant on their phone or smart speaker. In this case, your product must have enough value that users are willing to pay for it. For this business model to be successful, your product must solve an unsolved problem or create enough added value to convince users to pay for it, thereby achieving product/market fit. Unfortunately, the tasks performed by Amazon Alexa and other voice assistants are not valuable enough for users to pay for them.

Finally, you can think of Amazon Alexa as a channel to attract users to other money-making products. For example, Amazon believes Alexa will allow users to shop online more frequently. However, due to the limitations mentioned above, Alexa does not provide a good shopping experience, and users still prefer to use mobile phones or web applications to shop.

Basically this goes back to what was said at the beginning. From a scientific and engineering perspective, Amazon Alexa is truly brilliant. But from a product and business perspective, it does not have the elements to make money.

3. The next generation voice assistant?

The first generation of voice assistants had a great idea (using voice as an interface to interact with computers) but failed to create a profitable business model. We've seen this with VR headsets from the 1990s (which were too expensive and too low-quality) and AR glasses from the early 2010s (which didn't offer enough added value to justify their price point). Alexa and Siri are still selling well because they were developed by companies with deep pockets who, under normal market conditions, can afford to lose money on new products until they find a business model (or kill new products).

What’s next for voice assistants? I saw several ways out.

One solution is to wait until AI technology gets so good that it can support completely different applications (such as a voice assistant that is always one step ahead and proactively contacting you instead of being You activate it?)

Another solution is to move away from the current model of general-purpose voice assistants to more vertically specialized assistants that can adapt to different applications. This will enable voice assistants to be integrated into the context and workflow of various applications, making them fully capable of handling complex multi-step tasks. I think there may be viable B2B business models in this form, especially in industries that involve a lot of manual operations (manufacturing, restaurants and hotels, etc.), after all, voice assistants can improve efficiency and reduce costs. The added value to businesses will far outweigh the convenience consumers get from talking on their phones (just like the second generation of Google Glass found product/market fit in the handmade goods industry).

I’m not sure screenless smart speakers will ultimately be the right style for the voice assistant of the future. Many of our daily tasks involve visual elements, and pure voice assistants will be of limited use. It remains to be seen what the outcome will be in this regard.

Amazon has no plans to kill Alexa yet, but I think it might be time to move on to the next generation of voice assistants.

Original link: https://bdtechtalks.com/2022/11/28/amazon-alexa-revenue/

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