Amazon wants Alexa everywhere — something it could do with phones

Jason Redmond / REUTERS

A much-overlooked bit in
Amazon’s earnings press release on Thursday — in which Amazon
said “we want customers to be able to use Alexa wherever they
are” — has one Macquarie analyst speculating that the e-commerce
giant could be planning another foray into phones.

“We suspect, though this is admittedly speculation, that Amazon
will have to re-enter the phone market either directly or
indirectly in order to drive Alexa adoption,” Benjamin Schachter,
the bank’s technology analyst, said in a note to clients Friday
following
Amazon’s record-breaking earnings report.

“We don’t see how Alexa can evolve to its fullest potential
without being available prominently on the main device that so
many people carry everywhere, the smartphone.”

Amazon’s first attempt with Fire Phone famously went up in smoke
in 2015 after disappointing sales caused the e-commerce giant to

take a $170 million write down and cease production of the
products altogether. Now Amazon could use a new line of
phones as its Trojan Horse to get Alexa — its Siri-competing
voice assistant — into every part of its customers lives.

This time could be different for Amazon, other analysts have
said. Amazon scored a clear victory from the European Union’s chief
competition regulator in July when the court handed
down a $5 billion to its main competitor Google, saying the
search giant must support “forked” third-party versions of its
Android operating system, which originally powered Amazon’s Fire
Phone.

The decision would also allow Amazon to use Google’s popular apps
like Gmail and Google Maps on its phone. 

Currently, Alexa is available as an app, but still lacks a native
input feature like Apple’s Siri or Google’s own voice assistant.
Still, Alexa’s main gateway to customers’ homes is through Echo
speakers and other hardware partners like Sonos (which recently
filed for an IPO and will go public next week). 

Amazon executive
admitted in 2016 that Fire Phone failed because it didn’t
differentiate itself well enough from competitors —
something Alexa could do. 

“The phone segment is very well-served,” Dave Limp,
Amazon’s senior vice president of hardware, said at the time.
“And we didn’t come out with a product at that particular point
in time that was differentiated enough for customers such that it
got the momentum that we needed to see … it just didn’t
resonate to the next level of masses.”

Shares of Amazon rose about 1.2% in trading Friday following its
earnings report and are up 55% since the start of the year.

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