(Image from Time Magazine, 1999)
I must admit that I’m one of the admirer and armchair critics of Amazon and Jeff Bezos. Well, mostly just Jeff Bezos.
I still remember quite vividly the day I took up the Time magazine back in 1999 (as image above) when Amazon was just around 5 years old. The image of Mr Bezos and the article caught my attention towards Internet in general, and e-commerce in particular. I kept reading the article until the magazine torn apart and disintegrated (OK a bit exaggeration here). Back then, Internet was still in its infancy, e-commerce sounds like a scam waiting to be unraveled and anybody can mint money as long as you have some idea (however vague or slightest) and your startup ended with dot-com (or its variant). Back then, Amazon was still selling primarily books and operating at loss but eventually managed to make a small profit themselves after seven years in operation (albeit only about 0.5% of their total revenue of that year but a profit is still a profit, right?)
And then came the dot-com bust and 9/11.
For me honesty is the best policy. I admit during the bust I made a mistake by assuming that Amazon (together with eBay) will go down in the history as a company with great concept but not commercially viable. I was correct to forecast that most of the dot-coms will take a permanent residence at some quiet graveyard (anybody still remember Webvan or Pets.com?) due to either the business is based on hype, excessive spending or way too early for Internet users to catch up with their concept and business model (that is, if they had any). I was also proven correct to predict that Google and Yahoo! will come out just fine (although in Yahoo!’s case, they’re doing fine just long enough before got eclipsed almost totally by Google). But boy, I was wrong to put Amazon and eBay in the same group with the likes of Flooz or Beenz.
Fast forward to 2018, Amazon is selling more than just books. They are truly on a path to become an everything store and more. Amazon is no longer simply selling stuff online and shipped them to wherever their customers might be. Let’s see. A cloud computing juggernaut? Check. An ever-expanding private label? Check. Cashier-less offline store? Just started, but so what? Check. Streaming services? Check. A trillion-dollar company? Ditto. Check. Do I have to mention their Alexa & Echo, their smart assistance, which on a path to challenge smartphone as the next big thing? Or what about their potential move to become a bigger player in healthcare (Amazon already involved in healthcare business in the sector)? The term ‘getting Amazoned’ wouldn’t amount to nothing if they’re not serious or great enough to make a super huge impact in the industry that they involved in. When even a small hint that your company or business is about to ‘get Amazoned’, some less than cheerful news from the stock market should be expected.
Amazon Inside (And Outside)
Anyone still remember that logo, especially those who were born in late-70’s to early 80’s? It’s a famous Intel’s symbol to show its dominance in PC industry. Pretty much telling the whole world that as long as the processor inside their PC is Intel, the performance is guaranteed. Very much like an old mantra of ‘nobody gets fired for buying IBM’. Surely the marketing trick worked well during the PC-era of 90’s until mid-2000, when Intel was (and still relatively is) eclipsed by ARM-designed chip. Apparently, Intel forgot to put their processor inside smartphones, hence losing one of the great battle of current century although they still maintains quite a lead for microprocessor in cloud computing battle, so not all is lost for Intel. After all, smartphones still need to access some data located somewhere, right?
It’s 2018, and Amazon has more and more determined to one-up Intel’s marketing slogan by not only inside (online) but also outside (offline). Seems like recently Amazon always manage to come up with either more innovations (releasing Alexa-powered devices) or dominations (buying Whole Foods or getting into healthcare). It’s no longer a relatively small company like Barnes & Noble that is crushed by Amazon. We’re talking about the behemoth like Google, Microsoft and maybe even Walmart that’s getting the heat from Amazon’s ambition and expansion. Even in digital advertising business, controlled mostly by Google and Facebook is not free from Amazon’s attack. If the trend continues, we’re going to get a third player in this game (and websites are getting more and more crowded with all kind of ads, probably including this own).
What kind of weapons that Amazon possessed in the next battle? Let’s see :
Launched in 2014, Amazon Alexa has grown from a basic virtual assistant to a giant platform that has more than 50,000 skills and used by more than 3,500 brands worldwide. No longer you can ask Alexa for some boring stuff like what’s the weather would be like today (or any particular day), but it can even be used to control our home entertainment systems or even checking credit card balance or stock prices. Who needs to get the phone and query it when you can just shout ‘Hey Alexa’ from afar? Even the kids can be nudged to ask nicely and say things like ‘Please’ or ‘Thank you’.
If there’s one thing that I know from the last 20 years in technology, if today’s kids feel comfortable with particular technology, they will grow up with it, work and live with it and wouldn’t want alternative unless it’s 10 or 20 times better. Even that might not be enough. Remember the PC revolution during the 80s and 90s? Back then it was Microsoft vs the rest of OS (i.e Macintosh, BeOS, OS/2, AmigaOS etc). Microsoft won by making its OS open enough to be embraced by almost everyone and hit market share as high as 90% during its peak. And although failed to gain significant market share in smartphone, MSFT is still a force to be reckoned with other technologies like cloud computing and AI.
And I see Amazon Alexa is copying the similar template and strategy from Microsoft Windows, and maybe 10 times more ambitious.
You can say it’s an Amazon’s attempt to give a physical body to their Alexa (and try to break free from Apple or Google ecosystem). And I’d say it has gone wonderfully for Amazon. Amazon Echo (and Alexa) is clearly a market leader with about 66% market share (as at Q2 2018). Google (and maybe with Walmart) might be coming to steal Amazon’s throne and Apple might be concentrating much of theirs at premium level and price, but Amazon still apparently standing strong.
And with varieties like Amazon Echo Auto (which designed to work inside a vehicle, albeit with smartphone), Amazon Echo Show (Amazon Echo with LCD screen) and Amazon Echo Plus (similar with first-gen Echo but with capabilities to become a smart home hub), not only Amazon has creeping more into our living room but also outside our home. After all, how difficult it is for Echo Auto to track our whereabout when we use them?
Amazon Fire Phone
You can say that Fire Phone is a flop. It is. How many of us using them anyway? Amazon even has to write it down for $170 million. Maybe Amazon should call it ‘Cool’ phone instead of ‘Fire’ phone. That one belongs to Samsung Galaxy Note 7. But while Fire Phone was a failed experiment, FireOS (the OS that powered Amazon Fire Phone) clearly is not. Not only it survived, but it also the brain behind their massively-successful Amazon Echo (and others like Kindle Fire and Fire TV). And I’m sure Jeff Bezos doesn’t like to use its competitor’s OS version to power his business, so the replacement for a forked version of Fire OS might be underway.
And once that happened, it’s a matter of time before Amazon rebuild their smartphone war and try to win that battle again. Or maybe they will go straight to smartwatch instead. Amazon clearly follows us no matter where we go, and even if we go nowhere and sit on our couch all day.
Although the word is ‘Go’, it doesn’t mean that Amazon will go and get us the groceries. Rather, we are the one who still gotta go and get it ourselves.
Amazon Go is another Amazon’s attempt at a cashless-store market. How easy it is when you only have to swipe your phone, pick the stuff that we need, and get out of the store without having anything closely resembles a communication and interaction with other human being. The idea is that there are technologies that can recognise who you are, where you stopped at which aisle, what did you picked (or put back), how much you bought them and how long you spent your time there. It’s very much like China’s surveillance system, only at the smaller scale, at least for now. But if we want to see how far it could go, don’t go to Seattle. Just head over to Beijing.
And what stops Amazon from selling the same technologies to smaller chain store (I don’t think Walmart would be interested)? How much data they can glean from all of us?
How Soon Before All Of Us Get Amazoned?
Amazon is no longer an online site that sell things, but has become closer and closer to become a Big Brother that slowly but surely crawling into our daily lives, whether at home, office or anything in between. If Starbucks’s goal is to become a ‘third place between home and work‘, it’s clear that Amazon wants to become a ‘place between cradle and grave’. It might not be exactly what China did, but how close to that would it become? Will Amazon realised what they’re doing before it gets any ‘worse’?
I’m not holding my breath.