Reference no: EM131748388
Alexa and Siri Escalate Battle of Virtual Assistants
By Laura Stevens and Tripp Mickle | Sep 02, 2017
Wall Street Journal
Apple Inc. and Amazon.com Inc. are bolstering the teams that run their Siri and Alexa virtual assistants, part of a string of recent moves by technology giants to step up competition in an area seen by many as the future of computing.
Amazon is adding hundreds of engineers to the Alexa program and giving it hiring preference over other divisions, according to people familiar with the company's thinking. It also has put Tom Taylor, a veteran Amazon executive known for building up high-growth divisions, in charge after the former Alexa chief retired.
Apple, meanwhile, has shifted oversight of its Siri system to Craig Federighi, its top software engineer, after five years under the leadership of another senior vice president, Eddy Cue. That move comes amid concerns that Siri, which popularized voice assistants when Apple introduced it in 2011, has lost ground to rivals including Alexa and Alphabet Inc.'s Google Assistant.
Voice-driven virtual assistants like Siri and Alexa, powered by artificial-intelligence technology, are rapidly gaining popularity by making it simpler for people to perform computing tasks from searching for information to shopping to turning on home lamps. More than 4 billion consumer devices by the end of 2017 will make use of some kind of digital assistant, according to IHS Markit, a market research firm.
Apple, Amazon, Google, Microsoft Corp. and Samsung Electronics Co. are racing to make their assistants more powerful and pervasive, in part by trying to embed them in more devices. Apple still has the greatest reach among voice assistants, with Siri accessed monthly on more than 375 million Apple devices across 36 countries. Amazon's introduction of the Alexa-powered Echo speaker nearly three years ago sparked a new land rush, prompting Apple in June to unveil a rival device, the HomePod, that goes on sale at the end of this year.
The companies bring different strengths to the fight. Because of their dominance of the smartphone market, Apple, Google and Samsung have broad reach and enormous volumes of user data that they can use to train their assistants. Google, like Amazon, also draws data from its own home speaker, which uses the Google virtual assistant. Microsoft's Cortana is mainly available on computers running Windows 10.
Amazon draws its user data primarily from its retail website, which gives it an edge for shopping and related tasks. It also currently dominates in smart speakers -- its Echo has about three-quarters of the U.S. market for such devices, with more than 11 million sold through the end of last year, according to analyst estimates.
Amazon also has been aggressively signing deals with other companies to add Alexa to products ranging from Ford Motor Co. cars to Sears Holdings Corp.'s Kenmore refrigerators. Samsung has outlined a similar vision for its recently launched assistant, called Bixby.
Google said this week that it would open its assistant to other speaker makers including Sony Corp., and to appliance makers like LG Electronics Inc., to incorporate the assistant into dryers and vacuums.
Google also is taking aim at Amazon's e-commerce stronghold with a partnership announced last month with Wal-Mart Stores Inc. to let users of its Google Express shopping service order from the retail giant by voice via Google's virtual assistant.
Amazon, meanwhile, announced a deal this week with Microsoft -- its fierce rival in the business of cloud computing -- to link their virtual assistants so that people could, for example, use Alexa to access Microsoft's Cortana and check their calendars in Outlook.
Apple, in addition to rolling out a smart speaker, increasingly is enmeshing Siri in its Mac and iPhone operating systems, which Mr. Federighi also manages. His new role was noted on Friday in a change to his biography on Apple's website. An Apple spokeswoman confirmed the change but declined to comment further.
Gene Munster, head of research with Loup Ventures, said that Mr. Federighi brings more of a technical background than Mr. Cue, who heads internet software and services and is leading Apple's push into original video in Hollywood. Mr. Munster expects Mr. Federighi to open up Siri to more third-party developers -- an area where Amazon is far ahead -- allowing those outsiders to use the service much like he has done with Apple's iOS system.
"This whole area around voice is getting super competitive and it's important Apple steps up their game," Mr. Munster said. "This change to Craig overseeing Siri is one way to do that."
The ability to train assistants effectively is critical to making them more accurate and effective in responding to queries.
Google's smart speaker, which responds to "OK, Google," now understands questions as well as Alexa, at about 95%, according to Loup Ventures research, which tested 800 questions on both systems. Google previously lagged behind in a February test, understanding about 77% of queries, versus 94% for Alexa. Google answered 65% of the questions correctly, compared with 54% for Alexa, although both improved.
Mr. Munster said Google's resources pose a worry for Amazon. "If I am the person who is in charge of the Echo, I would be concerned about the war chest of data that Google has to make this experience better," he said.
The ability to train the assistants effectively is critical to making them more accurate and effective in responding to users' queries.Amazon has been accelerating the growth of its Alexa staff rapidly for years, and currently has nearly 1,500 openings mentioning Alexa on its job site. New engineers are developing features to help push Alexa deployment, with the goal of generating more data via greater adoption, according to the people familiar with Amazon's thinking.
Amazon's Mr. Taylor, a nearly 20-year company veteran, took charge in June and previously ran seller services, which has grown significantly over the past few years.
Amazon declined to comment on its Alexa strategy.
Amazon needs Alexa to get smarter to keep customers like Josh Vickerson, who bought a Dot -- a smaller cousin of the Echo -- late last year when it was on sale for $35. The 24-year-old originally tried out features like playing Jeopardy and integrating his Fitbit. Now he uses it to play videos, set timers and turn off the lights.
"It's fun to play with when you first get it," said Mr. Vickerson, a Rochester, N.Y.-based web developer. But "there's no enormous value proposition." He says he is considering purchasing Apple's new $349 HomePod after it comes out in December.
SUMMARY: Apple and Amazon.com are bolstering the teams that run their Siri and Alexa virtual assistants, part of a string of recent moves by technology giants to step up competition in an area seen as the future of computing. Amazon is adding hundreds of engineers to the Alexa program and giving it hiring preference over other divisions. Apple, meanwhile, has shifted oversight of its Siri system to Craig Federighi, its top software engineer, amid concerns that Siri has lost ground to rivals like Alexa and Google Assistant.
APPLICATION: Here is a nice illustration of differences in firm-specific capabilities, as highlighted in the resource-based view of the firm. Apple, Amazon, Google, Microsoft and Samsung bring different strengths to their virtual assistants. Given their dominance of the smartphone market, Apple, Google and Samsung have broad reach and enormous volumes of user data that they can use to train their assistants. Microsoft's Cortana is mainly available on Windows 10. Amazon draws its user data primarily from its retail website, which gives it an edge for shopping and related tasks.
QUESTIONS:
1. Why are the large technology companies upping their resource commitment to the development of virtual assistants? Why is this becoming an important strategic area? Why is it not just a mere amenity for users?
2. What is the nature of the competitive contest here? Is this a footrace with clear winners and losers, or is it more like a marathon with frequent changes in leadership? Is it actually important to win this technology race, or merely to stay abreast of the competition?