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Alexa Already Influences The Future Of Amazon

by Hayden Thomas / Feb 05, 2017 08:10 PM EST
Google Home VS Amazon Echo

Amazon reported Thursday the financial report for the fourth quarter of 2016 and said devices with the digital assistant Alexa were its best-selling products during the holiday season.

That's a promising fact for the trading giant, because Amazon Echo speakers, which run on Alexa's intelligence, still do not generate significant revenue, but are on track to do so.

Sales of Echo devices were nine times larger this Christmas compared to the same period in 2015. But the biggest bet is on the potential of Alexa's integration into third-party devices and apps, executives said during a call with analysts this afternoon.

Analysts such as Michael R. Levin of Consumer Intelligence Research Partners and Mark Mahaney of RBC Capital Markets see Alexa as the voice-driven operating system that will in the future control our homes, cars and other technologies. If that happens, it would give Amazon a big advantage over rivals like Apple and Google, and further, facilitate the purchase of any product on Amazon by just asking Alexa - from any device.

Amazon did not share the exact sales of Echo devices, but Levin estimates have generated revenue of about $ 800 million since its debut two years ago. Much more optimistic, Mahaney estimates that the figure could possibly reach $ 1 billion - or about 10 million devices - just this Christmas. Even so, it is not a large amount for Amazon.

In its fourth quarter of 2016, Amazon earned $ 43.7 billion in revenue, a 22 percent increase over the same period in 2015, although it is less than Wall Street anticipated.

Most of the revenue came from shopping at Amazon.com - not from the Echo speakers.

"Over time, we will find a way to monetize the different things we do," Alexa Group leader Alex George told CNET in January, "but for now we just want to create a good experience for consumers with a Platform of good services ".

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