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Panos Panay, Amazon Devices & Services senior vice president, introduces Alexa+. (Amazon Photo)
For many years, Amazon has been trying to put its Alexa voice assistant at the center of the smart home. But right now, Alexa in its current state can seem downright dumb at times.
And for anyone who has used voice interaction mode in popular generative AI chatbots, the obvious question has become, why the heck can’t Alexa talk to me like ChatGPT does?
But now it will — or at least that’s what Amazon is promising.
Amazon’s Alexa+ is an upgraded version of its AI-powered assistant, promising more natural conversations, improved context awareness across smart devices, and more seamless and proactive integration into daily routines. Alexa+ is rolling out in the next few weeks, starting on newer Echo devices.
This week on the GeekWire Podcast: Michael Levin and Josh Lowitz of Consumer Intelligence Research Partners (CIRP) discuss the Alexa and Echo business, and what the Alexa+ service means for the company and Alexa users. CIRP studies consumer behavior to provide insights for investors and industry leaders.
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Top takeaways
The state of the Alexa/Echo business:
Echo smart speakers have a dominant market share, around 75%, but growth has slowed considerably after an initial rapid adoption period, according to CIRP research.
Right now, the primary use cases for Echo devices are still playing music/audio and basic question answering, rather than more advanced home automation or shopping tasks.
Around 30% of Amazon Prime members own an Echo device, while only 12% of non-Prime members do, indicating the devices are more popular with Amazon’s core customer base, according to CIRP research.
Amazon says the total number of Alexa-powered devices globally is around 600 million, but that includes third-party devices beyond just Echo speakers.
Alexa+ is a major upgrade for Amazon’s voice assistant, but Alexa is playing catch-up. Some of the core features in the upgrade are table stakes in the larger world of generative AI these days.
Some of the new capabilities with Alexa+:
Alexa+ is expected to communicate more naturally and maintain continuous conversations, rather than requiring users to repeatedly say “Alexa” or other wake words.
Amazon says Alexa+ will be able to navigate online services, discover relevant providers, and complete tasks like arranging home repairs or ordering food with little or no user intervention.
The new Alexa can also understand and respond to the user’s tone of voice, adjusting its responses and remembering the context of conversations across different devices.
Alexa+ offers a persistent memory for important details like frequent flyer numbers, restaurant names, family recipes, or food preferences among different people.
It will be able to create complex Alexa routines from voice instructions, without using the Alexa app.
(See Amazon’s list of 50 things to try with Alexa+ for more.)
The business model for Alexa+:
Alexa+ will be available for free to all Amazon Prime members. This suggests Amazon’s primary goal is to drive Prime membership, rather than generate direct revenue from Alexa+.
For non-Prime members, Alexa+ will cost $19.99 per month. This pricing seems high (compared to $14.99/month for the larger Prime bundle, which will include Alexa+. It’s unlikely that many non-Prime customers would be willing to pay that much just for Alexa+.
Older devices not compatible with Alexa+ represents a significant portion of the current Echo installed base, which could drive hardware upgrades among people interested in the new AI capabilities.
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