Saturday, December 5, 2015

Perspective - Echo Amazon: a future changing product? || Satwik Arora || Great Lakes Institute of Management, Chennai || November 2015 edition


- Satwik Arora
Great Lakes Institute of Management, Chennai

There has always been a space for innovation in the marketplace for various products as people want to be updated with time and be in the race to use the latest gadgets. Let it be jumping from their I-phone 5 to I-phone 5c/6 or making a new account to any social media site that is gaining popularity, people want to go with the flow. The latest hit in town, a part of gossips among the tech savvy people is Amazon’s latest product “ECHO”- part speaker, part voice activated personal assistant for the home leaving some with scratching heads wondering what Amazon is thinking right now. Just like Siri, this cylindrical device will help you at your home in your daily tasks and will work on voice commands to play music, read news, search anything on Wikipedia, tell you the weather, set alarms,
remember shopping lists and even tell jokes to your family. It’s a 9 inch tall device and responds to the word “Alexa”.

There are programs similar to echo on smartphone devices that fulfill the same needs of a tech crazy person like Siri by Apple, Google talk by Google and Microsoft’s Cortana to provide information asked by them. These applications are not so outdated that Amazon can be a success with introducing this product as the consumers may or may not be a part of this innovation.


With the current specifications, obviously there is nothing that can be pointed towards the next big thing in technology but are there any scopes for improvement? If the product is coupled up with home smart automation which enables voice to control the lights and temperatures- Echo could be the future. According to Steve Beck of management consultancy firm cg42, voice command smart home automation could be the future. It makes sense that Amazon is trying to put a tangible product
and sensors in the home as its competitor Google is already doing it with its Nest Smart thermostat and smoke detectors. 
Also Apple is trying with its homekit platform too, so developers can build some apps that can work
together with the products which we call in today’s term “Technology Convergence” in marketing. 

How can it be a future:-

Any household would want to save its time on shopping the daily things and the sudden requirements that needs to be purchased going to the retail stores or even going to pick up their smartphones, ordering online. Now the future will be to shop with voice commands, all possible with ECHO as
the product could take Amazon from one click purchase to no- click purchase. It is just one cloud based software upgrade away from taking it to the next level. Just give voice command like “Alexa- I want to purchase Samsung Note 5” and boom your credit card will be charged and the package is on its way. While eating food you realize the salt, butter and juices are nowhere in the stock you keep in your fridge, thus you can command Alexa to order them online.

Lights and Temperatures
Going to the office you do not wish to keep the lights and AC’s on as obviously the bill is counting but many times our human brain cannot handle each and every task to save the cash. ECHO can be a savior in such cases when it automatically senses no presence in the household or is set a timer that switches off and on the electricity supply according to the time slot fixed. Technology going to that
level will be a delight to use.

Sensing theft activities by face recognition and automatically locking the house to make it more secure can be some add-ons that can be suggested to help Amazon take the industry to a next level. There can be an option to sense any such activity in the household and automatically playing a siren with calling to the nearest police station informing about the same.

All these features will help Amazon to bring a big innovation in the tech world and be able to market themselves on a large share with respect to the competitors having a differentiation difficult to imitate.


Smart home industry is a growing market and Amazon knows it but this move can be a disguise for the company being a bit too early for the market to absorb. There maybe a large customer base who may not be eager to join but now it is late and better not to back off but try. 

That is why:-
1. Amazon is distributing limited number of devices in the market so as to know the response of people on the product.
2. A test market to a selected number of customers so as to identify the flaws in the
product and whether to continue with the production or not.
3. Amazon is well aware that the future for smart homes industry is really a profitable sector
to be in and also ECHO has a great potential to bring into some revolution in that space but currently will be limited to its listening and speaking capabilities. The price point of Amazon Echo signals an even bigger push from the company to grow its Prime Membership. The device will cost $99 for Amazon’s Prime Members for a limited time and $199 for the non-members.
Consider the steep discount for the members it is an incentive to make their membership program grow and to make the current members loyal to the ecosystem. Also if you want ECHO and are not a member, you now have to sign up.

Another strategy of Amazon is to introduce the invite system for the purchase which is a new thing they have started. You have to put in a request for the purchase of the product and once the request is being rectified, the person will be notified for the purchase. It has two advantages, firstly, it is
a beta testing to know about the potential customers of the product. Secondly, it will develop a huge demand for the product as the product won’t be available in the market so easily.

It may be said though it is an attractive product to enjoy a new technology and put hands on but it is an early call to tell whether it will be a success or not because people may or may not accept the product as per the expectations of the firm. Also if the limited pieces and invitation strategy works for them then they would surely target large customer base with maybe new add-ons.

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