Amazon’s Q1 earnings call last night sounded somewhat similar to Google’s call just an hour earlier, highlighting a lot of the same AI and machine learning investment themes. Jeff Bezos discussed increasing leverage of AI and machine learning to drive operational efficiencies both internally and with AWS customers. On a smaller scale, the beta Amazon Go store in Seattle is one of several competing visions for the future of retail. Leveraging computer vision, sensor fusion, and deep learning, Amazon Go allows for a checkout-less shopping experience. We suspect Amazon’s bookstore expansion, beyond its six stores today, may soon begin to resemble characteristics of Amazon Go.
The most immediate AI lift for Amazon is coming via increases in Prime member engagement from Echo products and, more recently, Alexa-enabled Fire tablets. Commentary from the earnings call indicated Prime Music, Prime Now, and Amazon Fresh Grocery are all seeing meaningful lift from those voice-enabled devices. We highlighted Alexa’s recent momentum in our work, Can Anyone Catch Alexa?, now with more than 12,000 skills (apps) and roughly 100 smart-home manufacturing partners integrating Alexa. Contrast this with, by our count, only around two dozen device manufacturers using Google Assistant. With Bezos indicating a “doubling-down” on investment in Alexa and Echo last night, we expect Amazon and Google to remain head-to-head for leadership in the digital assistant market.
Another example of Amazon extending it’s lead in AI and machine learning is the new Echo Look, an Alexa-powered device for your closet. Echo Look features a camera that takes pictures of your outfit, then uses AI to make fashion recommendations and catalog your wardrobe.
Echo Look shows us what screen-less computing will look like in the future and, at the same time, how early we are in the transition. Amazon is pushing speech-driven computing faster and further, but the Echo Look also reminds us that we’re in the first inning of devices that will be increasingly commonplace as the next computing paradigm emerges. Adding cameras, sensors, computing power, skills and form factors to devices like the Echo product line will dramatically improve the utility of the category and drive adoption. Clearly, Amazon gets it and is determined to lead the way.
Disclaimer: We actively write about the themes in which we invest: artificial intelligence, robotics, virtual reality, and augmented reality. From time to time, we will write about companies that are in our portfolio. Content on this site including opinions on specific themes in technology, market estimates, and estimates and commentary regarding publicly traded or private companies is not intended for use in making investment decisions. We hold no obligation to update any of our projections. We express no warranties about any estimates or opinions we make.