The Ambient Device Business Model

Paul has mentioned a couple of times on podcasts how with each new tech ‘revolution’ the boom and bust seems to happen bigger and faster, and I would venture to guess this new ambient computing revolution will follow that trend.

What made me think of this was the dip in iPhone sales for many reasons, but one of them being consumers are holding on to their devices for longer. This is the same problem the PC industry has encountered where the computers they make are so good most people don’t need to replace them.

With Amazon Echos, Google Homes, HomePods, and Invokes there may never be a good reason for most people to upgrade them. Since they are so simple, there is very little which can be improved from a hardware side. More accurate microphones and better sounding speakers are about the only consumer facing improvements which could be touted.

So if these ambient devices are:

  • Not going to be replaced every few years
  • Not require a monthly subscription
  • Don’t currently push ads

Where will companies find the justification for keeping these devices supported? I would guess since Amazon might sell some things via their Echos they are the only company with some sort of related revenue stream. I personally would be super unhappy about Google pushing ads through my Google Home.

What do you think will be the long term life of these devices? Will Google and Amazon press Spotify and Apple for some portion of the streaming revenue? Will ads become a more major source of funding? Will the smarts be turned off and all of the speakers turn into Alexa and Google Home branded Wi-Fi speakers?

Conversation 4 comments

  • lvthunder

    Premium Member
    06 February, 2019 - 5:12 pm

    <p>For the foreseeable future they will just rely on growing the market to make money.</p>

  • AnOldAmigaUser

    Premium Member
    06 February, 2019 - 5:17 pm

    <p>Ads will be pushed, perhaps as suggestions, such as "I hear you are having an argument, how about a book on [childcare, relationships, marriage, etc.]"</p><p>Voice matching will be sold as a service to businesses and government agencies. Imagine chatting in a store, being identified by your voice and receiving a coupon on your phone. The store does not even have to have your information, just passes a voice sample, captured by an attentive, microphone and camera equipped mannequin, to a service.</p><p>And of course, Amazon and Google will have even more information about you.</p><p><br></p><p>How could the future possibly be better?</p><p><br></p><p><br></p>

  • Chris_Kez

    Premium Member
    07 February, 2019 - 9:07 am

    <p>Amazon and Google can also both make money from their native music services on these devices.</p>

  • provision l-3

    07 February, 2019 - 1:06 pm

    <p>I'm less familiar with Google's offerings but for Amazon and Apple I think the following:</p><p><br></p><ol><li>Services. I'm taking an educated guess here but I'm guessing the number one thing people use these for is music. So for Apple it is Apple Music subscriptions. For Amazon it is Music Prime. </li><li>Licensing. To be certified to work with Homekit and Alexa you have to pay Apple and Amazon respectively. Amazon also has its Alexa built-in program for developers that want to include Alexa in their products. </li></ol><p><br></p><p><br></p>

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