Amazon has released two products this year that bring the creepy. The Amazon fire phone watches you and sends data back to Amazon. The idea is it can give your information about everything you’re shopping for, or interacting with. With three cameras, the idea is that it can tell what you are looking at, what you’re wearing and all the things around you.
Now, the Amazon Echo, which is advertised to be “always listening” listens for your voice commands. Kind of like asking Google on smart phones for information. The difference, of course, is that Amazon wants to sell you stuff. And, presumably, you need an Amazon account so that your Echo can login and interface with the Amazon cloud database. That database houses the speech engine which tries to interpret what you ask.
At first, this sounds a little creepy as if Amazon wants to know all to sell people stuff. In fact, that is what Amazon wants. The Fire phone can also send data back so that Amazon can build a database of what prices stuff is selling for locally. Basically, it makes every shopper into a data collector for Amazon.
But before you get too wigged out, know that the Fire phone has been a huge flop. Three cameras or not, it seems that people just don’t care that much about the shopping features. At least not enough to buy this phone. Amazon has lost an estimated 1.7 million on unsold phones. Which brings us to WallStreet.
Investors are pressing Amazon to make some money. The Fire phone loss and now the Echo are not showing the investment community how Amazon is going to profit from these devices, or how the investors get their money back from this investment. At a time when Google’s voice search seems to work on Android phones and Siri on Apple devices, why would someone pay for a device like Amazon’s Echo?
Creepy and useless seems to be all these devices can boast. This may not be such a cheery time for Amazon. Yet the Kindle and Kindle Paper-White are selling well. These products make sense in the retailer’s mix. They sell a lot of stuff, much of which are books. Books can be easily digitized as books always start on the computer today. The metrics of selling digital books with a Kindle makes sense. Trying to sell physical products with the Fire phone does not. And now with Echo, Amazon Is trying to gather info to add to their recommendations. But buyers have been complaining that the retailers recommendation feature is broken. The recommendations engine that Amazon uses is suggesting that people buy – what they just bought. And the margin on Kindle books is huge. But the margin on physical stuff is small. So the Fire and Echo are trying to help the online giant compete in the lower margin business of physical goods.
That’s all fine unless you need costly new technology to pull it off. And it seems the Fire and Echo are the needed hardware to spy on consumers in an effort to win low margin sales. Not a good investment. And likely most creepy for investors who will tire of these failed experiments.