Why Ford and Others Are Going to Integrate Amazon Echo/Alexa

Ford and Amazon Echo / Alexa

At this years CES Ford announced a coming integration of Amazon Echo and the Alexa voice service.

Drivers will be able to speak to their Echo devices to, for example, unlock their cars or check the fuel level. In the car, drivers will be able to talk to Amazon’s virtual assistant Alexa (the technology behind Echo’s voice interface). It is the second scenario that is obviously the most interesting one for Amazon.

This has huge potential but it is still early. Ford didn’t even provide a timeline yet. Geekwire:

Ford didn’t provide any timeline for the planned Amazon integration. But the move is part of a broader trend of connecting vehicles to external devices and services — including smartphones, cloud services and in-home systems. The automaker said it’s also working on a similar integration with the Wink home automation platform. (..)

The market is large: Ford says it has more than 15 million SYNC-equipped vehicles on the road globally, and expects the number to rise to 43 million by 2020.

As Apple is not-so-secretly working on his own car and Google continues its quest to a self-driving car with mainstream capability car makers are becoming uneasy. The coming move from combustion engine to electric vehicles and, after that or maybe even at the same time, the more drastic change to self-driving cars will change the industry fundamentally. Every top manager knows what happened to industries that changed fundamentally with the entrance of Apple or Google.

Hence: Both tech giants provide in-car entertainment systems that customers want. But everyone, especially the car makers, know that these systems are entry points to a coming rapid iteration that will lead to those tech companies moving ever closer to the center of the industry (where the profits are made). Car makers give their customers what they want, but they’d rather not hand the keys to kingdom over just yet. This is the point where companies start looking for allies and are looking to create competition by cooperating simultaneously with several parties.

By virtue of not being Apple or Google Amazon has a good starting position for talks about cooperations and integrations like this.

As I wrote on Netflix and Amazon’s TV plans:

The industry wants neither Apple nor Netflix to become any bigger and more influental than they already are; while both keep growing nevertheless. Amazon is (and in video streaming has been for a while now) a great ally in this. It is a huge company with means for significant distribution, meaning Amazon can make a difference in the market. And it is able to make a difference now. Unlike, say, streaming services from traditional TV companies (studios, TV networks) or startups. Never underestimate instant gratification, even for Managers. Hence Amazon is in a good negotiation position (Amazon can just follow the lead of Apple or Netflix).

A similar dynamic can be applied with connectivity in cars.

Which is to say: Now that Ford has made the first move with announcing to integrate Amazon’s Alexa/Echo platform, the US automaker won’t be the last to do so. Others will follow in its footsteps.

It is going to be interesting to watch how Amazon is going to leverage this in the long term.

13 comments

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