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I don't think the entire space is dying. Amazon is having problems because Alexa has little benefit to them outside of direct monetization. They wanted people t

by jm4 4y ago

I don't think the entire space is dying. Amazon is having problems because Alexa has little benefit to them outside of direct monetization. They wanted people to use Alexa to buy things and no one wants to shop like that. So they have these devices and all this infrastructure to run people's kitchen timers, lights and play music. People will buy Alexa devices on Prime Day, use them dozens of times a day for years, and never make a dime for Amazon. Apple isn't necessarily in the same boat. Siri isn't particularly good, but it does all those things well. Most importantly, it keeps people on iPhones and in the Apple ecosystem, which does make money. You already have the phone and probably have a device that works with HomeKit so why not try it out. Next, you buy some new lights. Before you know it, you're controlling most of the lights in your house, streaming Apple Music and setting kitchen timers from your Apple Watch. Next time you need a new phone, you're not even going to think about anything else because if you change you won't be able to turn on your lights anymore. Apple has a plan that works and Amazon doesn't.

cupofpython 4y ago
Apple and the garden of eden. Dont take a bite unless you're going all in
smoldesu 4y ago
This makes no sense to me. Apple's plan works because... their lock-in is better? I can "control most of the lights in my house, stream Apple music and set kitchen timers" with Alexa, Google Assistant, Cortana and even Bixby. What is Apple's actual advantage here? How is Apple making money from this when Amazon does not?
- Tagbert 4y ago
  Apple makes money from the devices it sells. Siri makes those devices more convenient to use. Amazon is selling the devices at or below cost and hoping that Alexa will make the money (which it doesn’t)
  - smoldesu 4y ago
    That only tells me which one will exist longer, not that "Apple's plan works". I've genuinely seen zero people deliberately use Siri (on iPhone or Mac) over the past 5 years. Apple is certainly losing money on Siri too.
    - jm4 4y ago
      If you look at Siri in a vacuum, you're almost certainly correct that it isn't a moneymaker. But Siri isn't in a vacuum. It comes with a device with an average cost of like $1000. It may not necessarily be widely used, but the ones who do use it are highly likely to remain in the Apple ecosystem and use other products and services that are highly profitable. Look at all those Korean novelas and shovelware on Netflix. There are cohorts of subscribers who remain highly loyal because they're into it. Netflix isn't necessarily swinging for the fences with high brow, popular content that competes with the best studios in the world. Instead, they pump out a wide variety of content that keeps the maximum number of people subscribed. Apple is similar. They promote features - whether it's Siri, health, privacy, family sharing/controls, etc. - that will strongly appeal to some cohort and keep them on the platform. Then, they incrementally hook you into services until you're buying $1000 devices for the whole family and paying $30/mo for the services bundle. And once you're there, they have you because the switching cost involves turning your digital life upside down.
    - nottorp 4y ago
      I was one of those zero people until i realized i can tell Siri "add an appointment with Blahblah next tuesday at 11", it will actually understand that and it takes less time than using the calendar interface. I'm sure enough people find some small use for the voice commands that it's a good feature to have on the phones.
      - bombcar 4y ago
        Siri really shines with the HomePod or the watch I’ve found.
        4y ago
- shagie 4y ago
  Apples devices are smarter. This makes them cost more for the "same" hardware, but costs less for the computation. Apple isn't trying to make money with Siri. It's using Siri to make its ecosystem of Apple Music and similar more valuable to its customers. The limits that Apple puts on what it can do makes that cloud side computation less expensive. --- Consider that bit - less expensive. Apple doesn't run its own cloud in the way that Google, Amazon, or Microsoft do. So what does Alexa cost? It costs for AWS cloud time. That's the expense that it's running. Those skills that people use run on AWS compute time rather than a phone's local cpu and battery. A google search "costs" about 1 KJ of energy. Alexa has similar costs somewhere just for energy and other costs for the maintenance of the additional software and content. It costs something to maintain that joke database.
  - GekkePrutser 4y ago
    I don't think Apple is smarter. Siri is really basic. I can't even say "Turn on the lights and the fan". I have to present it all in bite-sized chunks. Come on how hard is that. I have a feeling there is no AI in these supposedly intelligent assistants. Only scripted stuff.
    - dljsjr 4y ago
      I don't know if it's device specific but I use "Hey Siri, turn on the overhead lights and the floor lamp" for example all the time. I have a HomePod though.
      - GekkePrutser 4y ago
        Weird, I have a homepod (mini) also. In fact I hardly have any Apple stuff anymore, I only got homepods because it was the most privacy-friendly option out of the big three. I just have an iPad from work which I used to set them up. And most of my automation goes through Home Assistant anyway. When I give a double command Siri literally tells me she can't do two things at the same time and I have to present them as two separate commands. Perhaps it's because I have it set to UK English? Perhaps it's smarter in US English. I'll have to try that.
- twobitshifter 4y ago
  I think the point is that apple produces software that doesn't directly make them money as part of their business model. Pages, Numbers, iMovie, Maps are all given away for “free” with devices. Siri is just another example of that. As you say, being able to talk to your phone is table stakes, not an advantage. But having that offering keeps sales of Apple hardware moving.
theptip 4y ago
Seems odd right? Just charge more than break-even for Alexa and you have a business?
- jm4 4y ago
  Not necessarily because the cost increases through increased use by the customer. The idea was to sell hardware at close to cost and then monetize the customer. The likely assumption was that Alexa users would buy more similar to how Prime customers buy more. Ideally, Alexa customers were supposed to use services like "subscribe and save" and then randomly tell Alexa to order more toilet paper or laundry detergent. Amazon wanted all the household stuff on recurring subscriptions. It would have been great. Increased revenue, better ability to bundle shipments together to cut costs, customers who don't even look at prices anymore. Instead, they sell a device for which they incur an operating cost while producing little to zero increased revenue and subscriptions.
  - theptip 4y ago
    Right, I read the Ars Technica article, I get the original idea. It turns out that monetization strategy doesn't work and the Alexa business unit is losing billions of dollars. I'm saying, new business idea: give up on the old strategy of Alexa driving induced profit in other business units, instead charge more than the breakeven cost of building devices and running the service. This will likely be substantially more, and fewer Alexas will be sold. But the users that do actually get a lot of value from the device and service they are using will pay more for it. The product/market fit to test is: How many customers would pay more for a device that's not trying to sell you things? Can you get a solid (but smaller) business just by charging more for the device? What features would you add to persuade the marginal user to pay more? Offline mode for privacy-conscious users? Lean in to home automation features? What about a true AI-powered personal assistant? What about per-user language training with a local model that gets refined by your voice samples, with that data not shared back to the cloud? Etc. Simple startup-style product iteration stuff here. You had a customer hypothesis and a growth model, and it was proven unviable. So can you pivot to find a viable business?
- ncallaway 4y ago
vineyardmike 4y ago
> Apple isn't necessarily in the same boat. Also importantly, Siri mostly runs off your iPhones processor, and apple doesn’t have to pay a big cloud bill for it, unlike Alexa.

by jm4 4y ago

cupofpython 4y ago

Apple and the garden of eden. Dont take a bite unless you're going all in

smoldesu 4y ago

This makes no sense to me. Apple's plan works because... their lock-in is better? I can "control most of the lights in my house, stream Apple music and set kitchen timers" with Alexa, Google Assistant, Cortana and even Bixby. What is Apple's actual advantage here? How is Apple making money from this when Amazon does not?

Tagbert 4y ago
Apple makes money from the devices it sells. Siri makes those devices more convenient to use. Amazon is selling the devices at or below cost and hoping that Alexa will make the money (which it doesn’t)
- smoldesu 4y ago
  That only tells me which one will exist longer, not that "Apple's plan works". I've genuinely seen zero people deliberately use Siri (on iPhone or Mac) over the past 5 years. Apple is certainly losing money on Siri too.
  - jm4 4y ago
    If you look at Siri in a vacuum, you're almost certainly correct that it isn't a moneymaker. But Siri isn't in a vacuum. It comes with a device with an average cost of like $1000. It may not necessarily be widely used, but the ones who do use it are highly likely to remain in the Apple ecosystem and use other products and services that are highly profitable. Look at all those Korean novelas and shovelware on Netflix. There are cohorts of subscribers who remain highly loyal because they're into it. Netflix isn't necessarily swinging for the fences with high brow, popular content that competes with the best studios in the world. Instead, they pump out a wide variety of content that keeps the maximum number of people subscribed. Apple is similar. They promote features - whether it's Siri, health, privacy, family sharing/controls, etc. - that will strongly appeal to some cohort and keep them on the platform. Then, they incrementally hook you into services until you're buying $1000 devices for the whole family and paying $30/mo for the services bundle. And once you're there, they have you because the switching cost involves turning your digital life upside down.
  - nottorp 4y ago
    I was one of those zero people until i realized i can tell Siri "add an appointment with Blahblah next tuesday at 11", it will actually understand that and it takes less time than using the calendar interface. I'm sure enough people find some small use for the voice commands that it's a good feature to have on the phones.
    - bombcar 4y ago
      Siri really shines with the HomePod or the watch I’ve found.
      - 4y ago
shagie 4y ago
Apples devices are smarter. This makes them cost more for the "same" hardware, but costs less for the computation. Apple isn't trying to make money with Siri. It's using Siri to make its ecosystem of Apple Music and similar more valuable to its customers. The limits that Apple puts on what it can do makes that cloud side computation less expensive. --- Consider that bit - less expensive. Apple doesn't run its own cloud in the way that Google, Amazon, or Microsoft do. So what does Alexa cost? It costs for AWS cloud time. That's the expense that it's running. Those skills that people use run on AWS compute time rather than a phone's local cpu and battery. A google search "costs" about 1 KJ of energy. Alexa has similar costs somewhere just for energy and other costs for the maintenance of the additional software and content. It costs something to maintain that joke database.
- GekkePrutser 4y ago
  I don't think Apple is smarter. Siri is really basic. I can't even say "Turn on the lights and the fan". I have to present it all in bite-sized chunks. Come on how hard is that. I have a feeling there is no AI in these supposedly intelligent assistants. Only scripted stuff.
  - dljsjr 4y ago
    I don't know if it's device specific but I use "Hey Siri, turn on the overhead lights and the floor lamp" for example all the time. I have a HomePod though.
    - GekkePrutser 4y ago
      Weird, I have a homepod (mini) also. In fact I hardly have any Apple stuff anymore, I only got homepods because it was the most privacy-friendly option out of the big three. I just have an iPad from work which I used to set them up. And most of my automation goes through Home Assistant anyway. When I give a double command Siri literally tells me she can't do two things at the same time and I have to present them as two separate commands. Perhaps it's because I have it set to UK English? Perhaps it's smarter in US English. I'll have to try that.
twobitshifter 4y ago
I think the point is that apple produces software that doesn't directly make them money as part of their business model. Pages, Numbers, iMovie, Maps are all given away for “free” with devices. Siri is just another example of that. As you say, being able to talk to your phone is table stakes, not an advantage. But having that offering keeps sales of Apple hardware moving.

theptip 4y ago

Seems odd right? Just charge more than break-even for Alexa and you have a business?

jm4 4y ago
Not necessarily because the cost increases through increased use by the customer. The idea was to sell hardware at close to cost and then monetize the customer. The likely assumption was that Alexa users would buy more similar to how Prime customers buy more. Ideally, Alexa customers were supposed to use services like "subscribe and save" and then randomly tell Alexa to order more toilet paper or laundry detergent. Amazon wanted all the household stuff on recurring subscriptions. It would have been great. Increased revenue, better ability to bundle shipments together to cut costs, customers who don't even look at prices anymore. Instead, they sell a device for which they incur an operating cost while producing little to zero increased revenue and subscriptions.
- theptip 4y ago
  Right, I read the Ars Technica article, I get the original idea. It turns out that monetization strategy doesn't work and the Alexa business unit is losing billions of dollars. I'm saying, new business idea: give up on the old strategy of Alexa driving induced profit in other business units, instead charge more than the breakeven cost of building devices and running the service. This will likely be substantially more, and fewer Alexas will be sold. But the users that do actually get a lot of value from the device and service they are using will pay more for it. The product/market fit to test is: How many customers would pay more for a device that's not trying to sell you things? Can you get a solid (but smaller) business just by charging more for the device? What features would you add to persuade the marginal user to pay more? Offline mode for privacy-conscious users? Lean in to home automation features? What about a true AI-powered personal assistant? What about per-user language training with a local model that gets refined by your voice samples, with that data not shared back to the cloud? Etc. Simple startup-style product iteration stuff here. You had a customer hypothesis and a growth model, and it was proven unviable. So can you pivot to find a viable business?
ncallaway 4y ago

vineyardmike 4y ago

> Apple isn't necessarily in the same boat. Also importantly, Siri mostly runs off your iPhones processor, and apple doesn’t have to pay a big cloud bill for it, unlike Alexa.