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Amazon is building the next important OS, and Google can't keep up

Google made a fundamental mistake by launching Google Home two years after Amazon Echo, says Ben Thompson of Stratechery. Amazon's Echo and its growing lineup of first-party hardware, including the Tap and Dot, are less significant to the company's future than Alexa itself, the voice-enabled operating system that seems to be growing in reach and intelligence more quickly than any other.

The Echo created its own market: a voice-based personal assistant in the home. Crucially, the home was the one place in the entire world where smartphones were not necessarily the most convenient device, or touch the easiest input method: more often than not your smartphone is charging, and talking to a device doesn't carry the social baggage it might elsewhere.

Thompson says that Alexa capitalized on the home automation trend at the perfect time, and because Alexa is not linked to any one piece of hardware, it can exist in as many rooms as a family can afford, without taking much away from the unassailable relationships we have with smartphones today.

Amazon seized the opportunity: first, Alexa was remarkably proficient from day one, particularly in terms of speed and accuracy. Then, the company moved quickly to build out its ecosystem in two directions:First, the company created a simple "Skills" framework that allowed smart devices to connect to Alexa and be controlled through a relatively strict verbal framework.

That simplicity has allowed vendors from Sonos to LG to seamlessly integrate Alexa into their existing lineups.

Secondly, "Alexa" and "Echo" are different names because they are different products: Alexa is the voice assistant, and much like AWS and Amazon.com, Echo is Alexa's first customer, but hardly its only one. This year CES announcements are dominated by products that run Alexa.

That's the beauty of Alexa: it doesn't cost the vendors anything (or at least, very little) to integrate, and because all that's needed is a microphone, a speaker and a connection to the internet — Amazon itself does all the hard work in the cloud backend — it can scale beautifully. And as we've seen with products like the Echo Dot, Alexa is better the more places it's in.

Google Home is arguably a better product than the Echo, that's no doubt: it's sleeker, cheaper, and even in its infancy, far more intelligent. But Thompson argues that Google still relies too heavily on needing a phone in-hand, and that its primary business model, search advertising, does not have the revenue potential in a voice-first product. Amazon, on the other hand, can afford to give Alexa away for next to nothing because it fosters the single-action purchase intent that fuels the company's core ecommerce business. Thompson explains:

Amazon, meanwhile, doesn't need to make a dime on Alexa, at least not directly: the vast majority of purchases are initiated at home; today that may mean creating a shopping list, but in the future it will mean ordering things for delivery, and for Prime customers the future is already here. Alexa just makes it that much easier, furthering Amazon's goal of being the logistics provider — and tax collector — for basically everyone and everything.

So what do you think? Is he right? Wrong? Discuss it in the comments below!

See at Amazon

Daniel Bader was a former Android Central Editor-in-Chief and Executive Editor for iMore and Windows Central. 

122 Comments
  • And then Microsoft will come stumbling in last, again, with Cortana and won't be able to capture more than 3% of the market.
  • Cortana is still a thing? I thought it died a year ago with Windows Phone.
  • its actually available in the play store. it wasnt terrible at all but just like the windows phone the need has already been filled. hard to bring something new even if its good
  • 90% of all computers in the world use Windows. With most of them on W10. Plus Xbox. So that's a lot of Cortana.
  • Cortana is still restricted to a few countries, and I don't know anyone that actually uses it - besides Windows-focused journalists.
  • They changed that restriction. Now the Cortana can be enabled based on language instead of countries. If you know English, even if you are in a country which does not have Cortana you can change settings for Cortana to interact in English.
  • I'm from Portugal. I won't be speaking to a PC, smartphone, speaker or smartwatch in English. I refuse myself. They have to find a way to bring this to every language.
  • you should also stop typing in english lol
  • Boa sugestão. Vou fazer mesmo isso. Imagina te falar numa língua diferente da tua em público e vais perceber o ridículo que parece
  • Actually, almost half of windows computers are still running windows 7 and the percentage running 10 is in the low 20s.
  • That will ultimately going to improve over time!
  • Exactly. And many of the people using Windows 10 disabled Cortana for privacy concerns. The future of computing is mobile computing on the phone and tablet, not the desktop, and Windows Phone is all but dead and on life support. It's available in the Play Store and App Store, that doesn't mean anyone outside or Redmond is actually using it.
  • And it is incredibly irritating on a desktop. Fortunately you can turn the irritating "Lady" Off
  • Don't be stupid. If you have Windows 10, you have Cortana unless you decide to disable it.
  • Exactly!
  • Does anyone actually use Cortona on Windows? I don't but I use Google Voice Search/Now often...
  • yep, all the time on PC's and a 950 XL.
  • I upgraded to Windows 10 from Win 7 back in July 16. I never looked back. But when I did upgrade, I disabled Cortana from the start. I just felt like privacy was being invaded. Fast forward to now and I've recently enabled Cortana. Why? Because I rethought the whole privacy thing. I do pretty much everything mobile on my phone which ultimately allows Google, the OEM of my phone, my carrier, & all the apps I downloaded full access to what would be considered my privacy. It just didn't make sense to disregard privacy concerns on my mobile in exchange for the benefits I receive and not do the same on my desktop. The truth is, Cortana is as helpful on my desktop as the Echo Dot is in my kitchen. Alexa can turn on lights & answer questions but she can not open files and programs on my computer. Cortana answers questions too and she can also open any program, find files, etc. Cortana has access to more information than Alexa because Alexa is primarily limited to reading Wikipedia, and that's if she understands the question. I asked her this past weekend "Hey Alexa, give me details about Rose Bowl 2017" Alexa's response was "I don't understand the question". My point is, if I can embrace Cortana after rejecting her from the outset, I believe others will too especially if Microsoft can integrate Cortana into 3rd party products. Cortana is good and reliable. Is my privacy being invaded? Probably so but no more so than Amazon & Alexa or Google and Google Home.
  • So, you've never used Cortana. That's one area I miss. Being able to say "Hey Cortana" do such and such, without touching my phone was pretty awesome. Patiently waiting for my S7 to have this ability with Google.
  • Install the google now launcher and in google now launcher settings turn on ok google detection on every screen. Its a better launcher than touch wiz anyway. Phone does have tpo be awake though.
  • Cortana is horrible. On the xbox1 it only gets about 30% correct on words.
  • I recalibrated my Kinect microphone after the fall update that brought Cortana, and ever since it's been above 95% right (was probably similar to you beforehand). Might be worth trying.
  • I don't get smart speakers and don't care to I prefer my phone .
  • It's nice to walk in to the house and say, "alexa, play top milli vanilli songs"
  • No thank you
  • Top Boy George songs?
  • Top Nickelback songs?
  • Coldplay anyone?
  • Alexa play Led Zeppelin IV
  • Hahaha! Sensational!
  • I think you'd be surprised. My kids will ask Alexa how to spell something instead of them asking me (to which I would have to look it up on my phone.) My wife will ask what the weather is for today while she's getting ready. While in the kitchen you can ask how many ounces are in a cup without getting your phone dirty (or your food dirty from your nasty phone).
  • You can do this with Google Home too. Sure, Alexa does have an advantage for now, but you can do "natural language" and follow-up questions on Home (ex: Who is the current President of the United States? How old is he? Does he have children? etc.), while Alexa cannot seem to do this as of yet.
  • Well, I just asked Alexa each of those questions and she answered correctly, including providing the President's daughters names, when asked. The difference I assume you are talking about is the conversational aspect of not having to provide repeat information in each query. I haven't really missed this in Alexa's abilities. Yet.
  • Ah, interesting. I didn't know they recently added this feature. I tried this at a friend's place and it wasn't working at the time. I'll give it to Amazon, they're not taking this lying down. I'd love to see both it and Google improve on this technology...which is a plus for us as consumers. :-)
  • Have you tried asking Alexa to find an iPhone? The syntax of the command that you have to say is horrible.
  • That ability got added to Alexa recently.
  • EXACTLY!
  • Do you also want Alexa to tell bedtime stories to your kids? Geez I mean where is society going with all this. I hope it's all a trend.
  • Technically it can do that. It will read you books in your Amazon library. Aka Audible
    But reading to your kids is as much fun to the parent as the kid, so I hope not.
  • I think you meant to say "a fad".
  • And what's wrong with technology providing assistance to make life easier or more convenient? I like having an assistant that can open my audio books without me needing to physical open the phone, find the apps, and tap around. A simple "Play ___" and my radio, audio books, and podcasts start playing.
  • You're in the minority. There is a reason alexa devices are selling like crazy.
  • It's for giving commands to connected devices (lights, alarms, Music, tv, ordering retail) & asking questions to get verbal answers.....When you don't need to drill down into an app or website for detailed information. I loved my "Xbox On".....Or "Turn to AMC", or "Turn off porch lights"...... And any numerous things that didn't require me to go find my phone, swipe to unlock, open 10 different apps, and tap around. It's instant and quick, and focused.
  • I don't see the part where Google can't keep up discussed in the argument. But a much larger point is the question of how we get Amazon to begin respecting user data, privacy and security.
  • Of course Bader will say that Google can't keep up in a title then fail to affirm that title in the article. Once you open the article revenue for the site is earned. Doesn't matter how bad an article is produced. I realize that I was also tricked into opening this post to read how Bader thinks that Google is behind again. *Tsk* when am I ever going to learn?
  • Again .. i gotta agree.. This piece is just .. silly. Google is this biggest data miner in the world! More than 70 billion data points at their disposal. To write an article saying that they are somehow "in trouble" in the home space is just a reflection how much Bader ISN'T an Android guy! Foolishness!
  • Well if the premise is true, it's true regardless of the opinion of Bader. I have no idea which OS he prefers.
  • The problem is that Bader didn't give an opinion and the title doesn't fit. He could keep the same title but should also add something like "...says analyst"
  • He did state it.
    They are 2 years late, doesnt have a lot of 3rd party support, and the "voice assistant" falls outside their core area of Search Advertising Revenue. Amazon is early, open, and already has the developer ecosystem in apps (skills) and compatibility with a wide range of 3rd party products (speakers, etc)......And is being installed in new consumer assistant products.
  • Those are reasons they are currently behind, but there is no reason (started) that google can't close the cap. Google just opened up to 3rd party last month.
  • I can't wait until apple comes out with their version and say that they were the first to come out with a home assistant.
  • I can't wait until the apple fad dies out, or is that too much to wish for?
  • I can't wait until the Apple hate dies out.. Is that too much to wish for?
  • Lol that was the best
  • Wow, low standards lol
  • Lol now THIS was the best. Very low standards lol
  • Internet winner
  • I can see where the apple hate comes from. As an Apple for for 10+ years, they are growing stale. All the computers are obsolete and dated! Mac Pro which I use is 5+ years old. I was looking into getting a Mac mini, but it is 4+ years old. The newest innovation that they came up with was a "Touch Bar" on the laptop! Woo Hoo! I like everything working together my phone, comp, iPad, etc. But they are lagging! Which is why I just bought a Google Pixel XL to try out. I love my Echo and Alexa. She is like part of the family! If you innovate and create something awesome, you have my vote!
  • Desktop doesn't have much room for innovation. They have excelled (as you even stated) in innovation in making all devices work together, seamlessly, and not being hobbled together thru 3rd party app workarounds. Your information seamlessly hands off between devices....Plus their integrated communication (texts, etc) between devices. That's where they've innovated. Making the Software work seamlessly and better than the competition. Hardware is at a point that innovation is diminished.
  • "Desktop doesn't have much room for innovation"
    >Did you miss "Surface studio"
    More to come. Desktop is not going anywhere. VR, AR integration and how we perceive PC will change.
    If we see the present Mobile phone market all the phones are same, nothing innovative, just incremental updates.
  • Yes.
  • It will be MAGICAL!! /s
  • I can't wait until this tired statement does out on every non-apple article
  • Not sure if Google Home is sleeker. Not digging the design personally. But they might be right, you don't mind voice commands when you're at home... Amazon is on to something.
  • Yeah, it looks like a solid air freshener. On the other hand Google Wifi looks nice... but maybe because it looks like an Echo Dot. ...Joe K.
  • It does look a lot like an air freshener, but that also will blend in more with a modern home. The echo? not so much. The dot looks much nicer tho IMO.
  • Also, from the device manufacturer perspective Amazon is a great partner as they just want to sell as much gear as possible, as we saw with the echo bundle deals throughout xmas. Google can do that as well, but obviously Amazon retail reach is magnitudes greater.
  • What? Alexa is just a set of apk's and mp3's, not quite an operating system, and the Echo itself is just FireOS, which is Android which is Google. Also:
    https://medium.com/@micaksica/exploring-the-amazon-echo-dot-part-1-inter...
    "All of the Echo Dot’s mp3s it speaks to you are in /local/share/earcon, so if you wanted to hack Alexa’s voice to be different, you can change out these audio files."
  • FireOS is no longer "Android". It's been forked several version generations ago.......And is now updated and maintained as it's own operating system. Alexa is an "operating system"..... In the sense, it's backend that handles all the work. The Echo & dot may use apks, but they access Alexa in the cloud.
  • How is Google home more intelligent? Even if you're correct it's far less useful. Alexa allows me to get ass-wipe delivered within two days in four words "Alexa order toilet paper".
  • BUT, what if you need an ass-wiping within the next 3 minutes.....two days is a long time to be on the pooper.
  • Lol agreed that's a long time to be in the thumper dumper.
  • The drones are coming to cut that down to just a few hours on the crapper. ...Joe K.
  • That would be awesome.....BUT.....unless that drone can somehow throw it in through the window, you still have to get up and go get it. Depending what you ate the night before, it could be a real mess. Nothing like wet lovin's running down your leg.....
  • There is much more than ordering stuff.
  • Like what? Reading Books? Alexa has it. Checking my Account Balance? Alexa has it. Music? Alexa has it. Weather? Alexa has it. Basic internet searches? Oh guess what Alexa can do that to. Google home can't compete.
  • Have you used Google Home extensively?
  • Every day on Android for years.
  • I'm just curious because it sounds like GH is the same service as on our phones. I've began to use Alexa Jr. on the my amazon app and it is pretty useful. I think that each has its uses and, just like phones, not exclusive product can meet every need. Why not both to cover each other's bases?
  • The first response hurts my brain. We have been using Google on our Android phones for years, this is true but Google Home is a different product based on what we have been using.
    Also I'm not quite sold on needing the ability to purchase tp or other crap with my voice, if I'm shopping online I want to be at my PC or on my phone. I understand Alexa does more but it seems to be the major reason people here need it.
  • Maybe your stupidity hurts your brain. Same underlying tech.
  • google assistant just came out the end of last year... it's not the same as google home
  • No. Google Assistant (not Google Now) is more robust than Alexa (or Google Now). Not only does it exist in Google Home and Android TV.......It's integrated into Pixel (and new Android phones)....... Meaning it's contextual awareness to your personal ecosystem is much more in depth. It connects to everything you do in the Google ecosystem. Files, media, calendar, smartwatch,maps, and more. So, without initiating a query, Google Assistant can produce & surface relevant information from your ecosystem when it's contextually relevant. And everything is connected. Google Home, TV, phone, watch, computer,...And all the apps & services you use on a daily basis. If you don't use Google services, it won't be as contextually powerful. But for people who use Google services and store their information in Google Services.....It's a very powerful assistant that "just works" to surface informed when & where you need it most without you needing to actively search for it.
  • Stupid looks good on you....
  • So no then.
  • Google doesn't have the best track record with projects that don't directly create revenue (example: Google Talk / Hangouts / Allo). Let's hope they see the good in investing in Assistant / Home.
  • Assistant gathers just as much information about you as Search. They are definitely making money out of it.
  • I purchased a dot and love it. Started with a few WeMo switches and skills, way cool. I almost consider it as disposal piece of tech at $39. I'll wait to see if google gets better down the road, but very happy right now with the dot.
  • I've now tried both. I like the echo better. The DOT is inconspicuous and allows me to control my TP-Link wifi light bulbs and Nest without issue. I know that Google's assistant can do that as well but like NOTUS said, I can say "order whats in my cart" and BAM! It's ordered.
  • Amazon is beating Google at their own game. Google makes their search engine freely available to get users trapped into their ecosystem. Now Amazon is making Alexa freely available to get users trapped into their ecosystem. Google that becomes Alexa that. Brilliant!
  • Not even remotely true...
  • I think Google can easily earn money on the assistant in the future. It's linked to your G account so they get even better ad targeting. Possibilities are endless for monetization in the future. At this point monetization is not a problem for Google, marketshare is. They have to commit to it 100%. So far the effort is to little to late. The Echo train is about to leave the station, they better start running to catch up.
  • I have both an Echo and a couple Home's and I don't quite get the comment about not being tied to the phone. I have pretty much given up asking Alexa questions as the vast majority of the time she just tells me to open her app for a search result. Maybe things have changes since I last really tried to use her feature set as I only have a couple skills enabled. In my use case Alex is primarily a bluetooth speaker for the wife's phone and something to talk to for quick weather or news updates or to control our Smartthings linked devices. Google home for my use case is more functional as I get more useful responses to my queries, the same Smartthings functionality, and Chromecast audio support that doesn't rely on bluetooth and me having my phone nearby. Plus its pretty nice to tell it to play something from Netflix on the TV and it works. Hopefully both platforms will continue to grow and challenge each other which will make both platforms better in the long run.
  • *Applause* You said everything that the general public wants to know. Using specific examples to highlight each unit's use giving us better information than the article. i come away with the conclusion that Alexa is a personal shopper first and a personal assistant second. Google home is a personal assistant first and a personal shopper 2nd or 3rd+. I don't see why someone has to make a choice of either/or. I can see Alexa holding hands with GH and both being beneficial.
  • I also have a number of these devices and primarily use the Echo for home automation with Smartthings since Ubi is available on my phone and the Dots are cheap and inconspicuous attached to the ceiling. The Amazon grouping for home automation is also more intuitive and less limiting than the Google Home. Where the Google Home really shines is its knowledge base and especially Chromecast integration. Play a specific program, pause, increase volume, turn on subtitles, etc. has really changed the way you can watch TV. Once they tweak the Smartthings interface or release their own home automation hardware (Revolv acquisition) there will be no reason to use Amazon except for the cost of the Dot and the form factor. Produce a small Google Home that is cheap and Amazon is not very appealing any more. For now, I use them both and find them both useful in different scenarios.
  • I was going to say the same thing. When I first plugged my Alexa in, she told me to download the app. Now that she's and running, more then half the **** I ask her needs to either be downloaded and enabled and or done from the app.... Seems pretty tied to a phone to me.
  • Both of them are good and hopefully each will continue to push each other to get better. Echo has 2+ year head start so it better be better right now. In the end, I'm not betting against Google if they really want this to be great. Lot of 🔥🔥🔥and $$$ to toss around.
  • Nah. Google was already ahead since people were buying cheap $30 prepaid phones to use as assistant long before Amazon Echo.
  • Google Assisant just came out last year and is only on the Pixel phone.
  • The only reason I dont use Cortana on my PC is because I'm a gamer and I've talked about it "my fault" its opened up. I have an Echo and I love it and I do prefer it over Cortana but that's because I like Amazon Services. But then again the stuff I buy on Amazon is mainly for my PC so yeah maybe MS doesnt directly get that money but then again they pretty much do.
  • "Hey Siri, can you please ask Cortana if Alexa or Google Home is better?"....
  • Amazon has 3 different echo products, an kinda big and expensive one, and compact and more affordable one and a rugged outdoor one. Google has one product, that some other products support.
  • I have to give Bader (sorry to be Captain Obvious but it rhymes with Vader. So if one instinctively associate him with the Dark Side, you're probably not that far off. But I digress.) the benefit of the doubt. This entire article is basically someone named Ben Thompson's point of view...Ahem...Analysis. So if we disagree with the arguments, we're actually disagreeing with Thompson, not Bader.
    Aside from the above astute observations, I don't actually have anything useful to say about this topic. I'm still waiting for Google Home to gain a few more tricks, and for the price to go below $100 where I'd consider it an impulse buy. Why not Alexa you ask? I don't know. Maybe I'm easily intimidated by smart females (kidding!).
  • By 2018 Google Home will own everything ... Watch what I say ...
  • Consider it watched. ...Joe K.
  • Both Amazon and Google need to work on global availability for Alexa and Home respectively.
  • I'm ready. It's time for another player who's more hungry but more than anything, I'm tired of googles political BS.
  • What political BS?
  • At least it's not apple
  • I use Google Home now more than my Echo, I still use Cortana but I absolutely love that I can ask Google Home to play 630 CHED via tunein radio without having to open the app and then search for Edmonton radio stations like I did with Alexa. Both of them give me stupid kid friendly jokes for a friends son and he cannot wait to go to school the next day to tell the rest of the kids. Google Home at times gets more right than Alexa and then other times they both don't have the answer.  Got my parents a Dot for Christmas, my Dad says Alexa is rude but he is finally trying to use it
  • Generally I have a high regard for Android Central but I could have gotten this article if I left a parrot with Thompson for a few hours. Not an original piece of analysis to be found. I expect much more from you, AC.
  • You need to lower your AC expectations... A LOT! It's all about click bait with the "7 Best _____" and "5 Things You Need to Know About ____" BS that's all about getting you to follow links without any substance. AC as a respected site under Phil's watch is dead. I just check in once in a while in the hopes that it would be great again but I've learned not to expect more than superficial bait posts. ...Joe K.
  • Yes, this is not the old AC. The guard has changed, and it's all about ads and clicks now, not original content and information.
  • Besides the initial set up of Google Home, I wouldn't say a cell phone is necessary. I'd actually say it's a good thing to be able to use the cell phone to control the device when there's an option to.
  • More copied crap fed to us... No innovation whatsoever.. Next up Google will try selling us a smartwatch and fail just like the pixel did..
  • I think you are ignoring the global impact in this article. In order for Alexa to really be what you claim it is for Amazon, Amazon would have to have more traction outside of the US and a minor influence in Europe. Alexa, and it's benefits, decrease quite quickly once you get out of the Western Hemisphere...
  • The Western Hemisphere is where smart home, Virtual Assistants, and connected devices is excelling. The boom in the majority of the rest is Low Cost, commoditized phones. As more countries become wealthy, its natural that this market will expand. But outside of USA, EU, and Australia.....It's a different market where this tech isn't as profitable or sought after.
  • The two companies have different goals and have different ways to influence manufacturers. Google wants to know everything to feed you ads and Amazon wants to be everywhere you might want to buy something. Google wants to have control over the whole system so you can't install anything else over top of it do they give out their tech (OS, UI, radios, protocols/Brillo, Assistant, Thread, Weave) reducing engineering. Amazon wants to sell AWS to cloud services so they make Alexa simple to add and compatible with anything.
  • "But Thompson argues that Google still relies too heavily on needing a phone in-hand..." Has Ben Thompson even used Google Home? I don't need my phone in-hand or near me to control my Google Home. I only used the phone when I added Smartthings to Google Home just like I did when I added it to my Echo Dot.
  • You read it too quickly. The author did not say "google home" requires you to have a phone-in-hand. They said "Google" needs you to have a phone-in-hand...to make money from you (as-in, google home as a service isn't going to be a big revenue stream for Google, the only profit is from the one-time hardware sale). The author then continues by explaining how the one-time hardware sale doesn't mean as much to Amazon because the service itself will make them money over time as you use the product (via Amazon store purchases).
  • Bader’s no value-added rehash of a tech marketer’s sloppy assessment of value in tech innovation.
  • Amazon has done the same thing Google did with Android against Microsoft and Google is moving to slow unless they want to sale one Google home for every six Amazon echo's