Yesterday’s post reviewed the burgeoning competition in the still relatively new artificial intelligence (AI) space of voice-powered digital assistants, ending with the observation that voice may be the cusp of a radical transformation replacing mouse and gesture-based digital interfaces with speech. This Part II post explores in more detail the impact of that digital assistant competition on the tech industry and its significant implications for competition policy and antitrust enforcement.
In light of the accelerating penetration and reach of AI, here are four key questions about this evolving market that should be most important to its consumer success and impact on competition.
1. What’s the End Game? Each of the major players — so far Amazon, Google, Microsoft, Samsung, Apple and soon to be Facebook — has a different business model and ecosystem. Some sell hardware, some software, others consumer electronic devices and some advertising targeted with digital information — all compete for the limited time and attention of consumers. Amazon sells much more than books and DVDs, including cloud computing services and now groceries, but the majority of its revenues come from retail, where it competes with the likes of Walmart. Hence, the intense competition among these companies in this new product category reflects the fact that despite different origins and business aims, the major technology developers and Internet services are now direct and substantial competitors. How each of these players responds to the growing demand for virtual voice assistants will have a direct correlation to who eventually wins or loses. Just like the mobile smartphone wars that saw iOS and Android triumph over the original market leaders in BlackBerry, Nokia and Windows Phone, tech companies have kicked off a huge competitive battle to ensure their virtual assistants stay relevant. Amazon may have an early lead, but is nonetheless working furiously on expanding Echo hardware options, Alexa functionality and third-party development. There is lots of capital investment involved here, so anticipating consumer demand, execution and innovation will likely be key to the futures of many in Silicon Valley and Seattle involved in AI research & development.MORE »