Amazon is seeing tremendous success with its line of smart speakers and Alexa virtual assistant, as revealed in its just-released holiday-quarter earnings results. For starters, the ecommerce company reaped a revenue of $60.5 billion, way up analysts' expected $59.8 billion record.
Sales of its Amazon Web Services business are also up at $5.1 billion, slightly beating one analyst's estimate of $5 billion, but Amazon singled out one thing that was truly remarkable: its popular and market-leading Alexa assistant.
Amazon Alexa Is A Force To Be Reckoned With
"Our 2017 projections for Alexa were very optimistic, and we far exceeded them," said CEO Jeff Bezos in a statement. "We don't see positive surprises of this magnitude very often — expect us to double down."
The CEO failed to explain exactly what the company's projections for Alexa were, and more importantly, what he meant by "double down." For some perspective, developers have already created tens of thousands of Alexa skills, or different voice command apps. The company has been pushing developers to create more quality ones too starting last year, when it began paying developers to build better skills.
Developers are also presently experimenting with paid Alexa apps, which might encourage them to create apps exclusive to the Alexa ecosystem and not proceed on porting them to Google Home, Amazon's chief rival in the smart speaker space.
Tens Of Millions Of Units Sold
According to Amazon's quarterly earnings, customers bought "tens of millions of Echo devices last year," a strong indication that Amazon has taken over the smart home market while Google still tries to catch up. Also, with so many Echo devices populating homes, it's easy to imagine for Apple's own forthcoming HomePod speaker to have difficulty appealing to audiences.
Add to that the price difference: the cheapest Echo device is the $50 Dot, while Apple's speaker is $349. Sure, the Echo Dot is probably no match for the HomePod, but it's probably the more appealing option for those wary of smart speakers but are willing to try it. In fact, it was the top-selling product on Amazon during the holiday period.
Amazon beefed up the Echo line last year by releasing a few more models, one of which is the Spot, an alarm clock-looking Echo device that sits on the bedside table. Amazon has also inked deals with several appliance manufacturers and even car companies to feature Alexa integrations in their products.
Despite all this, it's still not clear exactly how big of an effect the Echo line has on Amazon's overall business, especially considering the company doesn't post or break down revenue from its Echo unit. It's mum about a lot of other things too, like exactly how much of its retail revenue were driven by sales made by voice commands.
It's all a big mystery, and it'll likely continue being that way, but at least Amazon is confident its Alexa business will continue dominating the smart speaker market. If ever Google pulls something off that gives it a strong push, expect fierce competition to occur — which, as always, can only be good for consumers.