Can Amazon talk its way into the auto industry with Alexa?

on Jun24

Automakers are pairing up with Amazon to bring Alexa, Amazon’s voice-enabled intelligent personal assistant, into your car, despite the technology being far from widely accepted.

Amazon has made it easy on the automakers, charging nothing for the partnerships except the charges associated with developing the software for each car. That makes it a low-risk tech play for carmakers, who are competing to show consumers and investors they are technologically savvy.

And if Amazon really has dreams of worldwide domination — something that seems more likely given the company’s announcement it will acquire Whole Foods — having a device that acts like a personal assistant and routes people to Amazon’s products seems to make sense.

“Our mission is pretty clear, pretty simple: We’re here to bring Alexa into as many automobiles as possible over the upcoming years,” John Scumniotales, general manager for Amazon Alexa Automotive, told Automotive News.

Amazon wants to capitalize on a growing demand for connectivity by consumers as well as automakers looking to improve current in-vehicle voice recognition systems, many of whichhave harmed quality and reliability ratings for a decade or more.

“Given the automobile and some of the safety concerns, we think it’s the ideal experience for the car,” Scumniotales said. He referred to some current voice-enabled infotainment systems as “quite frankly unsafe.”

Consumer demand for virtual assistants such as Alexa remains a niche, but growing, market.

Not waiting

Automakers have traditionally waited to install emerging technologies such as Alexa until they become mainstream, as better technologies could emerge and consumers would be stuck with outdated systems.

But unlike installing hardware such as 8-track players into cars during the 1960s, installing Alexa is done through writing and updating software. That arguably costs automakers more time than money and is far less risky than installing a physical component.

At home, Alexa devices allow owners to use voice commands to play music and ask questions ranging from weather forecasts to store locations and hours. They also can control other “smart” home devices such as a Nest thermostat or their vehicles, among other things.

Right now, Alexa can be used outside the car to operate some basic vehicle functions such as locking the doors. Later this year, Volkswagen and Ford will let drivers use Alexa’s assistant functions while inside the car. A handful of auto brands have already launched “skills” for owners of Alexa-enabled devices. Hyundai last year became the first mainstream automaker to create a “skill” for Alexa-enabled, hands-free speakers such as the Amazon ​ Echo and Amazon Dot.

Owners of the devices and a Hyundai vehicle equipped with its second-generation Blue Link infotainment system can simply say “Alexa” to prompt the in-house system, followed by a command to remote start or lock and unlock their vehicles.

“I see the future as integration between your home and car. That’s exciting.”
Manish Mehrotra, Hyundai Motor America

Manish Mehrotra, director of digital business planning and connected operations for Hyundai Motor America, said Hyundai sees this as a growing market.

A “few thousand” owners routinely use Alexa commands each month, he said. That number is expected to continue to grow as the devices become more popular.

“I see the future as integration between your home and car,” Mehrotra said. “That’s exciting.”

Others such as Ford, Genesis, BMW and Mercedes-Benz have announced similar functions for many of their vehicles.

Alexa-enabled devices have grown quicker than many industry onlookers expected since their launch in 2014 due to their hands-free convenience, connectivity and functionality.

EMarketer forecasts 35.6 million Americans will use a voice-activated-assistant device at least once a month in 2017. That’s a 129 percent jump over last year.

The competition

“We are really bullish on how quickly this technology is going to be adopted,” said Jaimie Chung, an eMarketer forecasting analyst based in New York. “People are definitely ready for this and as the technology keeps improving, people are just going to keep adopting it faster and faster.”

Despite new in-home devices with virtual assistants released or announced by Google, Apple and Microsoft, eMarketer predicts Amazon will remain the dominant player in the category for the foreseeable future.

Amazon faces competition from current automotive suppliers. Speech-recognition tech company Nuance recently demonstrated its “Dragon” personal assistant with a Chrysler Pacifica minivan at a mobility and tech trade show near Detroit. The system has six microphones that can identify which person is speaking. It can learn voices and adapt vehicle settings based on personal preferences.

“Every carmaker has plans to do this,” said Eric Montague, senior director of product marketing and strategy, automotive business for Nuance. “The goal really is to create an emotional connection between the brand and the users.”

Fully integrating Alexa into vehicles poses risks if a better technology comes out or the software cannot be quickly updated. That’s why many automakers — beginning with Ford — are expected to use easily upgradable smartphone apps as conduits to bring Alexa into the vehicle.

“Consumers want this seamless transition from home to car,” said Michelle Krebs, senior analyst at Autotrader. “They don’t want to have to learn totally different technology.”

Volkswagen is expected to be the first automaker to embed Alexa into its vehicles, but owners of Ford vehicles with the SYNC 3 infotainment system will be the first to be able to use Alexa, as early as this summer, by plugging their smartphones into a USB outlet.

To use Alexa, drivers tap the voice recognition button on the steering wheel, then say “Alexa,” followed by a question or command, including directions that will appear on the vehicle’s infotainment screen. Ford has received extensive criticism in recent years from consumers and third-party rating organizations such as J.D. Power for glitches in its previous-generation infotainment systems.

Consumers can be very vocal when technology doesn’t work the way they expect it to. But Krebs said the automakers face risks if they don’t embrace emerging technologies.

“People know there will be glitches and they know technology is changing fast,” she said, mentioning Ford’s early voice-recognition and infotainment systems as examples. “They know it will evolve and get better.”

Dealers, third parties

Amazon, according to Scumniotales, sees use cases for Alexa in dealerships and other third parties.

“It’s of interest to them,” he said. “There’s a lot that we’ve been talking about how we could enhance that showroom floor experience.”

Edmunds earlier this year became the first third-party car shopping and research site to launch an Alexa skill. Information via its Alexa skill includes about 24 topics such as vehicle reviews, recalls and other shopping and ownership tools.

“We look for these type of up-and-coming trends,” said Greg Shaffer, senior director of product management at Edmunds. “This is a pretty clear-cut case. We saw the voice-assistant rise coming about a year ago and started efforts in this space.”

Scumniotales said: “When we look at automotive and we look at what we’re doing with Alexa, we firmly believe that voice is kind of the future.”

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