Apple – Battle for the smart home pt. VI

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HomePod delays have cost it dearly.

  • The HomePod has only one advantage in a market that is rapidly becoming all about the algorithms with hardware being left to those that really know audio.
  • The much awaited HomePod is now available for pre-order and will start shipping on February 9th
  • At $399, it is going up against some of the very best that the audio industry has to offer.
  • In 2017 the best digital assistants were only available in their own in-house hardware but this is changing rapidly as there is a plethora of third party products coming to market.
  • Furthermore, Amazon Alexa, Baidu DuerOS and Google Assistant all have substantial advantages over Siri, which in my opinion, make them much better smart assistants to have in one’s house.
  • Hence, I see the HomePod competing on two fronts and on the most important front, I see it being hopelessly outclassed.
  • These are:
    • Audio: There is no doubt that Apple can make excellent quality audio products.
    • However, in this category, it is not alone.
    • While I think it can comfortably hold its own in the mid to high end of the speaker market, I have doubts whether it can do so at 40% gross margins.
    • This is because competing solely on audio quality, there will be just as good audio products available at lower prices.
    • Digital Assistant. It is here that I think that Siri is hopelessly outclassed.
    • My tests have consistently shown that both Google Assistant and Duer OS are much better products in their relevant markets. (Baidu DuerOS does not yet exist in English).
    • Furthermore, when it comes to the smart home, Apple is hopelessly outclassed when it is compared to both Amazon Alexa and now, Google Home.
    • The star of CES was Google Assistant and not just because Google bought almost every piece of advertising space that there was available.
    • This was followed through on the show floor with almost every smart device manufacturer either already supporting Google Assistant or having it on the immediate roadmap.
    • Just like 2017, Apple HomeKit was a no show and I saw just one product (a smart ceiling fan) that had support for Apple’s smart home offering.
  • Consequently, I think that Siri is way behind in the smart home leaving Apple competing pretty much on audio quality alone.
  • The real competitors for HomePod are the likes of Sonos, Sony, Harman Kardon and so on, all of whom are likely to make their product available with either (or both) Google Assistant or Amazon Alexa.
  • This is why I see competition in this space moving away from audio quality and rapidly becoming all about the algorithms.
  • This combined with Google closing the gap in the smart home, is what has lead me to reverse my position and to expect that it will be Google that ends up triumphant in this space (see here).
  • Hence, from Apple perspective it appears that there will be equivalent sounding products with much better brains on the market at lower prices.
  • I think only a small sliver the hardcore Apple fanbase is going to buy this product which is not enough to make it a real success in my opinion.

CES Day 2 – Similar stories.

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Google shows the most progress at CES.

  • Apart from automobiles, the prevailing theme at CES is one of boredom.
  • Those looking for new trends have instead found the same stories as last year, albeit a bit more advanced than the last time that they were told.
  • This steady progress is the real theme of CES as hype has been wound up to fever pitch levels over the last few years and now the time has come to begin delivering.
  • The result is likely to be a steady year where autonomous vehicles inch closer to reality, where AR penetrates deeper into the enterprise but not where new trends rock the industry to its core.
  • AI is going to continue to be a theme, but I think that 2018 will be another year of very slow development.
  • Contrary to popular belief, RFM research has concluded that there has been very little progress in breaking down the really big problems of AI and without a new approach not much is going to change.
  • The current favoured technique, backpropagation, was discovered in 1986 and took 26 years to start producing decent results.
  • There are plenty of new techniques being worked on, but none of them have produced any results.
  • Consequently, I am pretty certain that 2018 will be another year of small increments dressed up as a big advance.
  • The one area where I have seen movement is in the smart home which I have discussed below.

Smart Home

  • Developments within the smart home have been steady but the options for developers and functionality has improved markedly.
  • This is because in addition to splashing Google Assistant over every available surface in Las Vegas, Google has been putting a lot of effort into pushing the assistant to developers.
  • Over the last 3 days I have spoken with or passed by the stalls of over 100 companies making a smart gadget of some description.
  • When I carried out this exercise last year everyone was supporting Amazon Alexa and almost no-one was supporting Google Assistant.
  • This year, everyone is still supporting Alexa but they have also either already included Google Assistant or have put it on the immediate roadmap.
  • This is a big change from 2017 and I think it substantially reduces the appeal of Amazon Alexa as Google Assistant remains a far better service.
  • The one exception is shopping and in this function Google is hopelessly outclassed.
  • However, Amazon is giving away the Dash Wand and I can see a scenario where users keep that stuck to the fridge for groceries and use Google Assistant for everything else.
  • Google’s position in the smart home has not improved quite as much as I was expecting, but its improvement combined with the way that users are interacting with digital assistants, leads me to change my position.
  • I think that Google now has the edge over Amazon is it has by far the better product and its native presence on smartphones means that it is dealing with far more inquiries than Amazon.
  • Hence, I think that Google should be able to continue to improve the assistant relative to Amazon thereby steadily increasing its relative appeal over time.
  • Furthermore, with a multitude of 3rd party products coming to market, this will no longer be a battle over hardware and sound quality but will become one fought in the ecosystem.
  • Here, I continue to think that Google has Amazon soundly beaten, the results of which I expect to see over the coming 24 months.

RFM 2018 – Top 5 at CES.

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RFM’s top 5 issues likely to prevail at CES and 2018.

Artificial Intelligence

  • I expect Artificial Intelligence to get top billing again this year as the both the hype and the flow of capital show no sign of abating.
  • Consequently, 2018 is likely to be a year of more feverish investment and hype making it more important than ever to separate real AI from those that are simply using statistics.
  • The three big AI problems remain mainly unsolved (see here) and RFM has concluded that progress in 2017 was very slow despite plenty of noise being made to the contrary.
  • I have no doubt that AI will become crucial for ecosystems trying to differentiate their Digital Life services from one another and the gap between the haves and the have nots is widening.
  • Google has distanced itself further from its competitors and in my opinion remains by far the leader in this field.

Google vs. Amazon

  • The battle of the digital assistants is likely to heat up this year and Google is clearly determined not to repeat the own goals of 2017 that allowed Amazon to dominate the market with an inferior product.
  • Signs of this are everywhere at CES with the Las Vegas Conference Center and the casino monorail fully decked out with entreaties to use Google Assistant.
  • Last year Google was nowhere to be seen at CES but this year I am hoping to see the results of its H2 2017 efforts through the inclusion of Google Assistant support by smaller developers in their smart home products and services.
  • Although, Amazon dominates the market for devices it is capturing only a tiny fraction of the voice requests as 91% of users that interact via voice use a smartphone compared to 17% that use smart speakers (see here).
  • Data is the life blood of AI and the data strongly suggests that Google is collecting far more than Amazon thereby ensuring that Google Assistant will continue to distance itself from Amazon Alexa in terms of ability.
  • If Google manages to close the gap in smart home this year, I think that this will put Amazon on the back foot and on a trajectory towards losing the smart home to Google.

Smartphones – Bezels, folds and the race to the bottom.

  • Bezel-less screens have become table stakes at the high end of the smartphone market meaning that 2018 will see this feature increasingly moving into the mid-range.
  • Samsung created the bezel-less market just like it did for large screens and now it must now look for something else.
  • The issue is that the Android user experience suffers from serious shortcomings compared to iOS meaning that it must offer othe features to compete at the iPhone price point.
  • Samsung has had foldable screens for some considerable time but poor yield and a lack of interest has meant that they have never been launched.
  • I have long seen the potential for foldable screens as a tablet form factor that can be folded away and slid into a pocket has the capacity to fundamentally alter both the tablet and laptop markets.
  • 2018 may be the year that Samsung feels ready to finally launch this as its options in terms of maintaining differentiation in an increasingly crowded bezel-less market are looking thin.

Automotive

  • The theme of digitisation in the automobile is in full swing but 2018 is likely to be another year where hopes and dreams substantially outstrip reality.
  • RFM’s analysis has shown (see here) that OEMs and tier 1s have not really digested the degree of change that is required for them to remain major players in their own industry.
  • For example, by locking the development cycle of the infotainment unit to the rest of the vehicle, the industry has ensured that units for which users pay thousands of dollars for, are four to five years out of date and hopelessly outclassed by $150 smartphones.
  • This combined with the almost universally awful user experience offered by automotive infotainment units puts the OEMs at risk of becoming also-rans in their own industry.
  • It also leaves the door wide open for ambitious new-comers like Byton which has launched an EV and Digital Life experience which shows some signs of having been given a lot of thought to the experience issues plaguing the vehicle.

VR/AR/Wearables.

  • With the exception of AR, very little is likely to change for both virtual reality and wearables in 2018 as the issues that hold them back remain unresolved.
  • Wearables are still a solution looking for a problem while the health use case continues to be limited by the quality and reliability of the sensors that they use.
  • Hence wearables will still be a recreational health and fitness market where users soon tire of their devices and consign them to cluttered junk drawers.
  • I would still be placing all of my attention on the companies that are working on making medical grade sensors that are both cheap and reliable to wake this segment from its slumbers.
  • I still see no real use case for VR beyond high-end gaming and events as the technical issues of cables, nausea and so on are still being worked on.
  • This leaves AR which I think is going to have a good year in the enterprise.
  • In the enterprise, the user experience matters less and the productivity use cases for AR in particular functions are numerous and demonstrable.
  • This is why many AR companies have pivoted towards the enterprise leaving Magic Leap as one of the few that is left struggling along in consumer AR.

Google & Amazon – Battle for the smart home pt. V.

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Google has a chance to displace Amazon.

  • I don’t think Google will go out of its way to patch things up with Amazon as having YouTube absent from Amazon devices could disincentivise users from going with Echo products giving Google Home a badly needed boost.
  • Google and Amazon have been sparring for several months but I think that the move by Google to pull YouTube off Amazon ecosystem devices may bring this issue to a head.
  • It is also a demonstration that content is king and as of today, YouTube is amore important platform than Amazon Prime Video.
  • Consequently, I think that Amazon needs YouTube on its devices more than Google does as users will simply go elsewhere to get it.
  • This sparring began three months ago when YouTube pulled its native support from the Amazon Echo Show.
  • This was followed by the removal of Nest products from the Amazon website and the implementation of a clumsy and far from ideal workaround to get YouTube content back on the Echo Show.
  • Google has closed this loophole as of today and will also pull support from Fire TV from Jan 1st
  • This battle between Amazon and Google is peripheral to their core businesses as even in video, they do not really compete directly.
  • YouTube is an encyclopaedia of user generated content while Amazon Prime Video is just like Netflix.
  • Google does have YouTube Red but this is a tiny part of YouTube overall.
  • Consequently, I think this fight is all about the home and here Google is way behind Amazon despite having the better product (see here).
  • This is because Amazon has been much better showing developers love and as a result they have preferred to develop their smart home products for Amazon Alexa.
  • The result has been that almost every device sold will work with Alexa with only a few working with Google.
  • This has changed over the last 6 months but Amazon’s ability to advertise its products on its website as well as giving its cheapest product away for free has allowed it to maintain its lead.
  • With the critical holiday selling season upon us, this is a great time to throw a spanner into Amazon’s works as not working with Google services is going to be a problem for the vast majority of users and may push them to consider Google Home.
  • I still see Google as being on the backfoot when it comes to the smart home but it has closed some of the gap to Amazon in terms of third parties and it remains a superior product.
  • This will be a key battle that is played out in 2018 and the level of support offered by device and service developers when they show their wares at CES in January will be a key indicator.
  • The market remains very lowly penetrated and so there is everything to play for but I still think that in the long-run Google should win as it has the better product.
  • I will revisit this position again once it becomes clear which way smart home developers are inclining for their 2018 product launches.

Digital sensors – Heart of the matter.

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Apple is creeping up on the medical devices industry. 

  • Apple has taken wearables a step closer to replacing medical devices, but the user experience is still so limited that the immediate term for the medical, devices industry still looks secure.
  • KardiaBand (AliveCor) is a strap for the Apple Watch which incorporates in it a sensor that is capable of producing a full electro cardiogram (ECG).
  • Critically this accessory has been approved by the FDA meaning that it is good enough to be a medical device producing medical data that can be relied on by a doctor.
  • The Apple Watch app that comes with KardiaBand can use the heart rate sensor on the Apple Watch to detect abnormalities and recommend to the user that he records his ECG.
  • Atrial fibrillation is a leading cause of stroke and it is thought that 66% of strokes could be prevented with early detection.
  • It is the signs of this that the KardiaBand app is looking for via the Apple Watch sensor which can then be confirmed through the recording of an ECG.
  • This does not come cheap at $199 for the band and $99 per year for the monitoring service, but if it works as advertised, I think it is a tiny price to pay for avoiding a stroke.
  • However, the use case is not ideal requiring a large metal plate to be present in the device’s strap and it does not offer always on monitoring.
  • This combined with its price means that it will only really appeal to users who are known to be at risk from stroke and it does not enable the replacement of an existing medical device.
  • I see the combination of Apple Watch and KardiaBand as a halfway house as it does not really offer real time monitoring to a medical grade, but it is a step in the right direction.
  • Sensors are becoming the eyes and ears of AI (see here), but almost all sensors are not nearly good enough to produce data that can be used in critical applications.
  • Nowhere is this more true than in eHealth where inaccurate data is useless at best and deadly at worst.
  • This is why there is still a big market for extremely expensive medical monitoring equipment, but I see signs everywhere that this will eventually come to an end.
  • This also explains the problems that the likes of Fitbit, Xiaomi, Garmin and others are having as the data they generate is of such low quality that it can really only be used for recreational fitness.
  • eHealth is where the quest for accurate data begins but I see this quickly spreading to other industry verticals.
  • Accurate sensors are one way to attack this problem but the other is to use better software to clean up and improve less-than-perfect data sources.
  • Google is a good example of this as it can use software to produce better imaging effects in portrait mode with one camera than Apple can with two (see here).
  • Given the substantial rewards that are on offer, I think that investment in improving the quality and accuracy of sensors will only continue to increase in the coming years.
  • This is an area where I would want to be involved.
  • The issue, of course, is to separate the solutions that have real prospects from those that are merely riding the wave of hype and easy investment.

Google & Amazon – Battle for the home pt. VI

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Opportunities to break in are fast disappearing

  • Google seems to be closing on in launching a Google Home based product with a touchscreen which indicates that Google’s understanding of the smart home user experience is improving quickly.
  • This is bad news for others like Essential (see here) that are looking to compete in this space as both Google and Amazon are starting to make progress on addressing the areas where they have been weak in the smart home.
  • If Google can now improve its position with the developers of smart home products, it will be in a good position to really take the fight to Amazon which still dominates with over 70% share.
  • Earlier this year I identified two major problems with using voice-based digital assistants in the home.
  • These were:
    • First, voice control: RFM research (see here) has found that voice communication with machines is very far from being good enough to work effectively without a screen for output.
    • The issue is that even the best machines are not yet intelligent enough to provide a useful experience using voice-only and often have to fall back to a screen.
    • In Google Assistant’s and Alexa’s case has meant using the screen of a smartphone which is not an optimal experience especially as most voice usage occurs when the hands are busy doing something else.
    • At launch Essential Products had taken this into consideration as its small device (Essential Home) has an attractive looking screen on the top.
    • This looks much better than hideous Amazon Show which seems to have been designed to be a jack-of-all-trades (master of none).
    • I think that Essential hit the nail on the head and its product should optimally fix the single biggest current problem with human machine voice interaction with its integrated screen.
    • However, should Google come up with an attractive take on Google Home but with a screen, I think this will lessen the appeal of Essential Home materially.
    • Second, fragmentation: Despite Amazon Alexa being able to talk to almost everything, the experience has been horribly fragmented.
    • Google Home has been no better and has also suffered from their being fewer compatible devices.
    • The real use case for the smart home is where all elements in the home are aware of each other and can be controlled together.
    • For example, the use should be able to say “I am going to bed” resulting in the doors locking, blinds drawn, heating turned down and so on.
    • Instead each separate device has had to be manually operated and adjusted.
    • With each launching a service called “routines” (see here and here) both Google and Amazon have moved to start addressing this issue.
    • How well these “routines” work remains to be seen but critically, both companies have recognised the biggest problems with their services and are moving to address them.
  • The net result is that the opportunities for small differentiated services to break into this space by doing something better is closing fast.
  • This combined with the fact that developers will be making their devices work with Amazon first (and maybe Google) will make it even more difficult for smaller players to break-in.
  • Market penetration remains very low which means there is still a chance, but new entrants need to act fast as the big players are moving much more quickly than their size would indicate.

Yandex – Homeless.

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Alice needs a hardware home.

  • Yandex has jumped on the digital assistant bandwagon but with its history, it should be able to produce by far the best product for the Russian speaking market.
  • However, it will be unable to serve the majority of use cases without hardware to carry it into the home or the vehicle.
  • Yandex is the pre-eminent internet company is Russia with 65% market share in search and just seen off a challenge from Uber (see here) to also become the dominant provider of ride hailing.
  • Most importantly of all, Yandex has been crunching data for over 20 years, which according to RFM research (see here), is a major contributor to its RFM rating as No. 3 in AI behind Google and Baidu.
  • Consequently, a digital assistant is an obvious product to launch and is one that has a much better chance of succeeding in Russia than any of the others even if they are taught to speak Russian.
  • The assistant is called Alice and is the result of putting together a series of AI projects that the company has been working on for some time.
  • These include voice search, weather, news, maps and so on.
  • Two of the key features include:
    • First, speech recognition. Yandex claims that the assistant demonstrates near-human levels of accuracy when it comes to understanding speech.
    • This is no great feat in English anymore but in Russian, this is likely to put Yandex meaningfully in front.
    • Second, context. Alice has some short-term memory in that it remembers what the previous question was and is able to answer a follow-on question in the context of the first.
    • This is quite a difficult AI problem to solve and the only other player that I have seen do a decent job of this is Hound from SoundHound.
    • I not seen this ability in Google Assistant, Amazon Echo, Microsoft Cortana or Apple Siri.
  • Alice is available in the Yandex Search app on iOS and Android as well as in beta on Windows PC but this is not where it is most needed.
  • Usage of voice assistants predominantly occurs when the user’s hands are occupied such as in the car or in the kitchen.
  • Consequently, to address this use case Alice needs to be resident in a home speaker of some description and, potentially, in a vehicle infotainment unit.
  • Yandex has stated that there will be further products forthcoming and I am pretty certain that a speaker (probably in conjunction with a known audio brand) will be shortly forthcoming.
  • Given Yandex’s heritage in AI and its dominance in search, it looks unlikely that Amazon or Google will be able put up much of a challenge leaving the Russian speaking markets open for Yandex.
  • It will have more difficulty if it wants to expand overseas but Russian is a big enough market for Yandex to fare pretty well just by staying at home.

Google – Brain boxes

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Clever devices are useless without volume.

  • Behind the carefully orchestrated event was a series of strategies aimed at driving penetration of devices which to date have been very disappointing.
  • Google made up for slightly below par hardware by maximising its leadership in AI to provide best in class functionality as well as some unique features that no one else is likely to be able to copy for some considerable time.
  • However, the key to badly needed volumes will be execution as Google completely bungled the open goal left by Samsung after its Note 7 disaster.

Pixel 2 / 2 XL

  • Google has updated the Pixel phones and has moved to OLED displays.
  • In contrast to iPhone X, Google has opted to make use of the always on display feature that allows key information to be displayed when the screen is off with almost no impact on battery life.
  • Why Apple declined to make use of this excellent feature on the iPhone X is a complete mystery.
  • What really sets the Pixel 2 apart are the new features such as Google Lens which offers the best image recognition and the fact that Google uses AI to do with one camera while everyone else needs 2.
  • However, Google openly admitted that volumes of Pixel have been disappointing and its offer of a free Google Home Mini is clearly aimed at driving badly needed volumes of this device.
  • Pricing remains punchy at $649 for the Pixel and $849 for the XL making the comparison to better looking Samsung s8 and iPhone 8 inevitable.
  • I suspect price is going to be an issue for users considering this device.

Google Home.

  • Two new products were introduced:
    • First: Google Home Mini ($49) which takes direct aim at the best-selling Amazon device (Echo Dot) in another clear attempt to drive badly needed volume.
    • Second: Google Home Max ($399) which goes up against Sonos and Apple HomePod.
  • The broadening of the portfolio should help Google increase its penetration of the home but the smart home piece is still badly lacking.
  • Google claims that 1,000 devices from 100 manufacturers now work with Google Home but it failed to demonstrate any and instead concentrated on products from Nest.
  • Google also launched routines which is exactly the same as the Amazon Echo function of the same name and something that all smart home controllers need in my opinion.
  • The integration of Google Home with other Google devices and the functionality being added is far ahead of anything else available but the smart home bugbear continues to rankle.
  • This means that anyone serious about smart home is likely to choose Amazon simply because they know that anything made for the smart home will work while the same cannot be said for Google.
  • This needs to be fixed and will remain the reason for Google’s potential defeat at the hands of Amazon because elsewhere it is by far the best product available.

Google Accessories.

  • Two companion products were launched which deepen the cross-device functionality as well as highlight Google’s core AI strengths.
    • First: Pixel Buds ($159). These take aim at Apple’s popular AirPods (also $159) and while the design looks inferior, the functionality is excellent.
    • This includes an exciting implementation of Google Translate that works with the Pixel phone to enable usable voice translation in 40 languages.
    • It also allows easy access to the best in class Google Assistant in a similar way to AirPods.
    • The difference here being that Google Assistant is a substantially better service than Siri.
    • Second: Google Clips ($249). This looks like a regular GoPro or Yi camera but the differentiator lies in its functionality.
    • The idea with clips is to position the device during an event or gathering and leave it to gather the best photos and video clips.
    • Again, this is Google using its leadership in AI to differentiate and if this feature works well, I suspect that it will be a very good reason for users to buy this product.
    • The number one use case for GoPro and Yi cameras is family despite their sporting image and it is this use case that Google is taking aim at.
    • If it works well and gains traction, this spells more trouble for GoPro which has struggled with software and ecosystem from Day 1.

Take Home Message.

  • Google has substantially deepened its cross-device capability with the new launches as these devices should all work extremely well together.
  • I think that Google comfortably leads the industry in this capacity.
  • Furthermore, much of the functionality that Google has demonstrated should make its way onto the Android devices from other manufacturers driving which should really help penetration.
  • How well they work on the hardware of others is a concern as manufacturers tinker with Android that always seems to result in inconsistent and subpar performance of apps and services.
  • Consequently, in terms of driving deeper and richer services for its ecosystem users, this was a successful event but the real question remains what volumes will Google’s own hardware achieve?
  • These services will obviously work better on Google controlled hardware where the endemic fragmentation and lack of software updates are not an issue.
  • Execution and marketing are the two things I am looking for from Google as to date, these have been woefully lacking.

Automotive Ecosystem – Dyson C5?

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Not convinced Dyson has what it takes.

  • Vacuum cleaner maker Dyson has announced that it will be producing an electric vehicle that has more hallmarks of the Sinclair C5 than the Model S.
  • Dyson intends to produce a fully electric vehicle by 2020 which will feature:
    • First: Solid state batteries. This is one of the holy grails for battery technology as lithium batteries can be extremely dangerous when exposed to physical trauma, overcharging or excess heat.
    • This has been a focus of Dyson for some time but whether it has cracked this thorny problem remains to be seen.
    • Second: Electric motors. Given Dyson’s history with household products, there would seem to be a natural progression into electric vehicles.
    • Third: Premium price. Dyson is sticking to what it knows in positioning its vehicle at the high end but in this segment, it will face fearsome competition.
  • I think that there are two critical attributes that will be required to succeed in a world of electric vehicles and Dyson has neither:
    • Automotive experience. As Apple has found (see here), making cars is extremely difficult and requires a lot of upfront investment.
    • Dyson plans to invest $2.6bn in developing its vehicle which is not that much compared to everyone else investing in this space.
    • Consequently, it has a lot to learn and not much money to invest which I think will leave it wanting.
    • Digital data. RFM research (see here) has concluded that understanding the importance of data generation in vehicle is likely to be critical for the success of the OEMs in the long-run.
    • Players such as Google, Apple, HERE and TomTom are pushing hard in this space with OEMs such as Tesla and BMW already working hard to improve their differentiation using sensor data.
    • Dyson’s current product line up does not have any data collection nor does the company have any real experience with regard to using data to make its customer experience better.
    • I see Dyson as firmly in the ship and forget category rather than the ship and remember that I think is essential going forward.
  • Furthermore, most of the money in the automotive industry at the moment is made through the financing of vehicles and here Dyson also has no experience.
  • Consequently, I think that Dyson is pinning its hopes on differentiating via its battery.
  • Range anxiety and charging are two of the biggest limitations of electric vehicles today and if Dyson can offer differentiation by fixing either of these two problems it may have a chance.
  • That being said, I think that the secret to solving these problems most quickly lies in making lithium batteries safer rather than using another substrate entirely.
  • According to Amionx 50-80% of the weight of an electric car battery is made up of packaging to protect the battery against the kind of trauma that will cause a battery fire.
  • If the battery can be made resistant to physical trauma, overcharging and heat then the weight of the package can be substantially reduced.
  • This would enable a much higher capacity battery to be used for the same weight giving a big increase in range.
  • My research leads me to believe that this solution is going to come before solid state batteries meaning that range will not be something with which Dyson will be able to differentiate.
  • Consequently, I am struggling to see how Dyson will compete effectively in this market as it lacks almost all of the core competences that I think are required.
  • Furthermore, it will be up against the biggest automakers which are already shipping in big volumes as well as the biggest ecosystems who have tens of billions of dollars to invest.
  • It has been 32 years since arguably the biggest disaster in British innovation (Sinclair C5) but perhaps we are due for an upgrade.

Amazon vs. Everyone – Battle for the home pt. V

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Amazon goes better, smaller cheaper.

  • Amazon has raised the bar in the digital assistants battle right before Google’s hardware event on 4th October with an update to the Amazon Echo home speaker and a big upgrade to the user experience.
  • Amazon has launched two new speakers to replace the Amazon Echo, one of which is has extra hardware to optimise the smart home experience.
  • On top of this Amazon has created an over the top experience that allows the user to tie together a range of Alexa skills that it hopes will make Alexa much more intuitive to use.
  • Two new Echos have been released to replace the original.
    • First: The new echo is smaller, has better sound quality,comes in 6 colours and will cost $99 which is half of what the original did at launch.
    • It has a new microphone array that should improve audio performance in terms of noise cancellation and wake word making the overall experience less error prone.
    • Importantly, this is now cheaper than Google Home and looks set to continue what has become a race to the bottom in smart speakers.
    • Second: Amazon Echo Plus has all of the above but also includes a built in home-hub that enables the automatic discovery and set-up of devices that support Zigbee.
    • The device costs $150 but also includes a Phillips Hue smart light bulb to get the user started.
    • This will enhance the smart home functionality but it in no way covers all available devices.
    • Third: Amazon has launched Alexa Routines that allows the user to tie together a series of actions into one command.
    • The user will now be able to say “Alexa, I am going to bed” and the lights will be turned off, doors locked, TV turned off and so on all in one go.
    • It will also be possible to schedule these sorts of actions.
    • This will not work with all of Alexa-enabled devices and skills but I think it represents a further step forward.
  • With this update, I think that Amazon has achieved two goals:
    • First: It has put itself ahead of Google in the hardware race with an improved device that is now meaningfully cheaper than Google’s offering.
    • Whatever pricing Google was considering for Google Home 2 may now be quickly re-thought.
    • Second: The horrible user experience using Alexa’s skills may now take a big step forward.
    • A lot depends on how good this experience is and how well it works but if it is good, it will bring Alexa into line with what I consider to be smart home best practice (see here).
  • Amazon has had by far the most aggressive roll-out of hardware that supports a digital assistant of any of the major ecosystems.
  • There are now a total 8 different types of home device that all carry the Alexa digital assistant with a large number of third party devices in the works.
  • This is critical because a large majority of the usage of digital assistants occurs when user’s hands are busy meaning that the smartphone is almost always useless in most use cases.
  • This gives and advantage to those that provide a physical device present in the home that use an audio wake word.
  • Google has this with the home but there is only one device whereas Amazon now has 8 all which are much better at controlling the smart home than Google is.
  • This puts Google on the back foot right ahead of its launch despite the fact that it has a much better product when considering the performance of the assistant and its ability to correctly respond to enquiries.
  • Google’s response on 4th October will be key to its outlook in the smart home and based on its performance to date, I am not optimistic.
  • I continue to think that Google is at risk of suffering a VHS vs. Betamax-like defeat in the smart home.
  • I don’t like either Amazon or Google on valuation grounds preferring instead Tencent, Baidu and Microsoft.