The Six Five team discusses the Amazon Annual Devices and Services event.
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Daniel Newman: Pat, big story of the week. There’s a robot at my feet. Amazon had their big devices launch. You and I both covered this closely. Tons of stuff to cover here. I’m going to let you take the first stab here because there’s no way you can suck all of the oxygen out on this one, but come on, what do you think there? Are we getting robots? Is that going to be part of our life? What else?
Patrick Moorhead: Yeah, so I think what I’m going to do is I’m going to hit everything but the robot and leave the robot for you. I know you had some fun things to talk about there and there’s a little bit of controversy about the way that that was positioned. First of all, I just want to say overall, this once again reiterated Amazon’s lead in the home. If you ever had a question about the smart home, you probably shouldn’t anymore because not only does Amazon keep doing the brilliant basics, and it’s funny that a voice-enabled speaker is a brilliant basic, but the big companies can crank those out. Apple, Google, and Amazon, Microsoft exited that business, so it wasn’t easy for them, but then again, their center of the world is not the consumer, so strategically I understood that.
A couple of products that I wanted to point out, first of all, the Echo Show 15, which is essentially a show that you mount on the wall or on a stand. You and I both had the opportunity to take that for a spin for a week or 10 days, and a really interesting device that I could see it using more when my family was in the home. If nothing else, a joint message board, but also, how many times do you go and wonder what the weather is going to be like? Sometimes we look at the phone. Other people prefer to get on their PCs, maybe even ask your smart speaker that, but that’s what I found myself doing a bunch. When I wanted to look at YouTube stuff together or even doing cooking with Paula, it seemed to help me a lot. I consider this a new category product for them, which I thought is still a big deal here.
One little adder on that is that Amazon disclosed that they have a new neural network accelerator called the AZ2. Not a whole lot of the bits and the bites across that, but then again, this was a consumer show, but the nice thing is that we’re going to see more inference at the Edge. I would say Google probably that they had made the earliest announcement of how they were going to do this with their end devices. Nice to see Amazon on their second- generation shift. What does it do? It makes things like face log-in a lot easier on the Echo Show 15, and lessens the need to phone home to do some core type of voice matching or face matching. I thought overall that was a good thing.
The second thing was a product called Amazon Glow, and Amazon Glow is for kids and it’s actually a communications and activity device where you’ve got a parent on one end or a grandparent and a kid on the other. Literally, I’m thinking I should have had some pictures of this, but essentially it projects an image on the floor for the kid and then there’s a camera in it, and then the parent can work through it through any Amazon device that has a display. You can read books together, you can color with them, you can do certain activities. The way that I looked at it, it kind of reminded me if you remember the HP Sprout that was a similar concept that was more for B2B and it was about 10% of the price of Sprout as well.
The last thing I’m going to talk about, actually not the last thing I’m going to talk about. They added a display to Halo, which is you might not even know that Amazon had an exercise wearable on the wrist, but didn’t have a display. What they did is they added a display. Now, they’re going to go really head to head with Google’s Fitbit, so things are going to get pretty darn interesting. Looks like they’re putting most of the cost into the service. You get one year of service with it, but it’s really inexpensive at $79.
The last thing I will cover before I’ll give Astro the Robot to you is the maturation of its security. First off, there was a vertical solution through Home Depot for rent that came out which was for construction job sites. It came with different levels of weatherized… It’s orange, of course, it’s Home Depot, but I like this play because the more vertical you go, the higher the profits and the more you can reach. Amazon is starting to get into I’ll call it a very small business or small business capabilities as opposed to limiting this to a consumer solution.
The final thing in I would say in accordance with that strategy is they brought out a Ring Virtual Security Guard. Essentially, instead of you watching a camera when it comes out and a cat jumps on the camera outside and wakes you up, they’re actually contracting with a third party to where they will be watching what comes on the camera. “What was that alert? Was it a positive? Was it a false positive?” They can actually talk to a potential intruder or your mother-in-law surprising you when you are out. They understand deescalation and the important things of that. That kind of rounds it out. The maturation of their security offerings.
Daniel Newman: Yeah, you hit a lot of things, Pat, on the head, and so kind of leaves us at Astro. I will say there is a bigger story under the surface that is blooming within the Amazon devices group that everybody needs to take into consideration. I’ll dive into this more on another segment here at a later time. They brought Astro out on stage. I don’t necessarily want to run through the product itself too much because there’s a ton of videos out there. You can see what it is. It’s a large touchscreen. It can do videos, so it can roll around with your kid and your kid can FaceTime or do video with Grandma and it’s rolling around with you.
This device is really a paradigm shift. Astro, a $1,000 personal robot that can basically learn an entire floor of your home. That’s, by the way, something I’ll talk about more in a minute because there’s some debate about that. It has sort of a telescoping camera that can look at things and report back. It’s got security functionality where it can make noise. It’s got a little bit of ambient technology where it’s got a personality, although it doesn’t speak yet, but it is really a first of its kind. I think what we have here is a really interesting inflection point in society where the idea of a robot for every family or human, this is very Jetson-esque, and Amazon being the company that’s trying to break through here.
As a whole, I think the technology will go through some hurdles to becoming mainstream adopted. The price at under a thousand is going to limit its audience in the early days to a slightly more affluent group of people, but in terms of what it can do, gaining experience in the world and people seeing robots in the home, its ability to potentially have some security value in the home are all very interesting. The market came out with a number of challenging articles through the media about it. The two biggest challenges were its market readiness and safety and its privacy and surveillance.
I’m going to talk about the latter first very quickly. Any article that talks about privacy and surveillance with an Echo device is a potshot at best, and here’s the reason I say that. We carry a device around in our pocket that we willingly allow to surveil our every move and activity, our every like, lust, and thought, and we share it willingly with these devices and they have cameras, they have microphones, and we knowingly do it with the device, but we do it with numbers of different applications where we agree to privacy terms that we don’t even read. If we’re worried about a robot that can roll around and follow you and surveil you in your own home, this robot’s not changing anything until you throw your phone away.
Okay, so now that we’ve got the privacy and surveillance discussion out of the way, the safety discussion. This one’s more nuanced. There was speculation that this device was going to come out, and then there was other speculation that this device was not going to come out. The reason it wasn’t going to come out was because this is really hard. Okay, anybody that’s ever used a robot vacuum cleaner knows that while it’s supposed to work one way, it doesn’t always work exactly the way you expect. The learning, the ability to do the job well, and this is a device that has exponentially more technology packed into it in terms of capabilities, the way these devices are going to create interactions with pets and animals, the way it’s able to truly learn the mapping of a home.
There were some articles in The Verge that talked about how it throws itself down staircases. The thing is a physical harm risk within homes and families. All of that stuff will be sorted out when these devices go out in the wild, but these were all… I want to note this very importantly. These were undisclosed sources. You would hope there’s a lot of integrity in the journalism, but in the spirit of sensationalism, I really do sort of wonder are the people who came out and helped build this product that supposedly trashed it to the media, I hope they were talking about the latest software, the latest version because how the device might have acted even two or three weeks ago, that could be five or 10 software iterations later ahead of a launch.
I do want to see all of its intelligence, the chip technology that went in it, the training and education and inference of this device. The maturation of this device will be something to watch, but as a whole, I think this is very exciting. It’s breakthrough. While Elon Musk was in spandex on stage somewhere or had a person dressed in black spandex on stage pretending to be a robot, Amazon actually delivered a robot. I want to say that this is breakthrough. This is paradigm shift. This is a new thing that the world has to get used to. I’m also going to say that I could talk for another 20 minutes, but we have three topics in about 13 minutes to finish out this show, so I am going to move on to the next one.