This year could usher in a new era for Amazon in the context of AI devices as reports suggest that the Amazon Echo will dominate the AI space in 2017.

In 2016, the Amazon Echo dominated the sales and ended up being one of the top-selling items on Amazon.com. Forrester Research's estimates suggest that 6 million Echo devices were sold in 2016.

The Amazon Echo features a personal assistant also known as Alexa, an AI assistant which is equipped to handle functions such as answering questions, playing music and even controlling smart devices.

Even at the recently concluded Consumer Electronics Show 2017, Echo ruled the roost as many companies including LG, General Electric and Ford  announced that their respective products will rope in Alexa.

Challenges For Echo

The biggest challenge that Echo may encounter will come from Cortana, Microsoft's intelligent personal assistant and the Google Assistant. Reports suggest that even Apple is forging ahead with the development of an Echo-like smart home device powered by Siri.

Google enjoys a few advantages over Amazon, as firstly it can better anyone in terms of searching and delivering answers to any question, which happens to be a very important aspect for a voice assistant like Alexa.

"Google benefits from its huge search inventory, and has invested far longer in machine learning than its rivals," says Thomas Husson, the principal analyst of Forrester Research.

Secondly, at present there are almost 1.5 billion Android users across the globe and most of the devices have the option of being upgraded to the Google Assistant, whereas Alexa has just started to appear on phones and televisions.

Microsoft too has its own advantage with a huge dominance in producing business software like MS Office and more. Auto manufacturers like Nissan and Volkswagen as Tech Times reported will rope in Microsoft's technologies for its next-generation cars, which includes deploying Cortana.

Echo's USP

The appeal of Alexa is primarily that it comes with AI commands already embedded in its system. It also allows users to connect with Twitter, Uber, Nest Thermostats and more.

The Echo is tied directly into Amazon's e-tail ecosystem so with every order, more data goes into its recommendations. Seamless integration with the massive Amazon inventory is another reason why it is growing popular.

As Echo's reach grows with time, all will be sieved through various devices down the digital pipeline to the end user.

"Amazon will increasingly subsidize Echo by bundling content (think music, video) with the device. They can afford this since this is not core to their business model: the end-goal is to facilitate interactions," shared Husson.