Amazon Echo: What You Need To Consider Before Buying

By Patrick Moorhead - November 11, 2014
Amazon just recently announced what looks like a very innovative product, the Amazon Echo, a hybrid speaker with voice recognition to answer certain questions and do certain tasks. I have actually signed up for one for research purposes and know what I am getting into, but before you buy one, you really need to consider that the Echo is more about mining you, your friends and your family for deep insights than being an inexpensive speaker and answer genie. To better understand Amazon’s motives here, you need to consider their business model. Amazon is in the business of selling you everything you need from clothes to groceries to electronics to gifts and everything in-between. To do that better and more efficiently, they need to know more about you, your friends and your family. By knowing more about you, your friends, and your family, they can better suggest new things for you to buy, exactly when to serve the offer up and even the set the right pricing to increase the probability you say “yes”.AMAZON-ECHO I think the best way to show this in action is to use some of the examples Amazon uses as examples of questions you can ask Echo and how this could be useful to Amazon.
  • Shopping lists: “Add Heinz ketchup to the shopping list.” OK, this one is easy. Add to your Amazon shopping list without lifting a finger. This is about as overt as it gets. It helps Amazon speed up the time-to-purchase, increase the chance you buy it from them and will know what was on your list that you didn’t buy from them so they can figure out why. It also helps build that wonderful profile, by each person, because Echo should be able to determine which person is adding it to the list.
  •  To do lists: “Add ‘clean garage’ to the to to do list”. This one is one step from buying as many times, doing something requires buying something. Do you need a broom, a mop, some shelves? Amazon can help.
  • Question and answers: “What’s the average temperature in Italy in the summer?” This one is about buying more things from Amazon for a deeper look at the topic. Naturally, if you want a deeper answer than Wikipedia, you should buy a book, DVD or Bluray from Amazon. This also helps with profiling. Are you looking at sophisticated things like Beethoven or Monster Truck Racing? Because Echo should be able to distinguish between voice types, it could create pseudo profiles.
  • News, weather: “What’s the weather like in Laguna Niguel?” This is all about profiling and getting your interests. Amazon Echo already knows where you live, so it pays special attention to asking about weather about another location. Amazon would love to sell you airline tickets, books and media about those other cities. While sports team scores and movies aren’t there yet, trust me, they will be. Are you constantly asking about the Cleveland Browns? Then you must need Browns jerseys, books, and ads for StubHub, right?
  • Set an alarm:  ”Time to get up Joe.” You now start your day with Amazon and Amazon now knows when to start serving ads to you and paying attention to what is going on in the house. I wouldn’t be surprised if Amazon considers sneaking in an ad or two to that morning wakeup. “Hey did you know next week is Thanksgiving? Did you order that turkey yet? Want to re-order the one you bought last week? Just say yes.” This also seems like a user incentive to link Echo to your calendar, which is an invitation for Amazon to access your calendar, a treasure trove of information. Most calendars list birthdays, who you meet with, where you go, where you work, working hours, etc., and all this juicy information improves amazon’s profile on you.
This is really just the tip of the iceberg and outlines some of the capabilities Echo has today or could have today. The Echo technology, which sports seven (YES SEVEN) microphones, Amazon’s massive cloud back-end and army of data scientists should also be able to determine the following:
  • Unique home occupants: Echo should be able to distinguish between the number of unique voices and, if it hears those voices a lot, Amazon could determine that you live in the house. Do you care if Amazon knows this?
  • Home visitors: Because Echo should know who lives in the house, it seems like it should know who are the visitors. Do you care if Amazon knows this?
  • Gender and age: Our voices carry distinct patterns and there’s no reason to think that Echo couldn’t determine this. Do you care if Amazon knows how old you are?
  • Happiness, sadness, anger: Like gender, our voices carry distinct patterns when we are happy, sad, or angry. Do you care if Amazon knows if occupants are happy, sad, or angry?
  • Who is home: Because Echo can create pseudo profiles and should be able to determine the sound of a door opening and closing, it shouldn’t have a hard time determining who his physically home and who is not. Yes, it would be hard if no one is talking, but over time, Echo should be able to pattern match against what that unique person does after they walk through the door. Do they drag their feet, clod around, or do they barely make a sound? What does their gait sound like, a determinant of stride length? Do they first hit the fridge? Walk upstairs? As humans, we are creatures of habit and Amazon is great at finding out those patterns. Would you be comfortable Amazon knowing if you are home, away or who is home?
  • What we watch and listen to: If Echo can hear the TV and music, it knows what’s playing. Do you care if Amazon knows what you watch on TV, podcasts or music?
Yes, Echo could do a lot if left unsupervised. One things Amazon has done to quell some of those fears is to add a “wake word”, which is “Alexa”. But do we know if Echo isn’t listening outside those times? No, we don’t know that yet. We have one web page to go on so far with a standard privacy notice at the bottom of the page. I am hopeful that Amazon provides this information front and center on their web site as they don’t need Echo sullying their reputation of trust that it has with so many people. If the Amazon Fire Phone were dismissed early for being too expensive, buggy and self-serving, Amazon really needs to watch Echo. It is low priced for sure to Prime customers at $99, but if it comes off as too self-serving and too invasive to privacy, Amazon will be in learning mode again as they are with the Fire Phone. My hunch is that Amazon is going down that same Fire Phone path.
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.