The Ambient Device Business Model

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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?

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