The utter failure of the Fire Phone apparently hasn’t curtailed Amazon’s huge ambitions in hardware. The company today unveiled Amazon Echo, a slightly quixotic, 9-inch tall speaker that plays music, fields voice commands and Internet queries, responds in a pleasant conversational voice, and of course (since this is Amazon, after all) will obey instructions to put various products into your Amazon.com (AMZN) shopping cart.
This Amazon demo video of a family interacting with Echo tells you everything you need to know about the device. (Fair warning: It’ll also make your family seem pretty dysfunctional by comparison.) Like Google’s (GOOG) service Google Now, the device is persistently listening and can be activated by uttering the name “Alexa.”
Amazon has been developing Echo inside its Lab126 offices in Silicon Valley and Cambridge, Mass., for at least four years. The device, codenamed Doppler or Project D, was part of Amazon’s first attempt to expand its device portfolio beyond the original Kindle reader.
Amazon has acquired several speech companies over the years, including Evi in the United Kingdom, a text-to-speech company called Ivona, and voice recognition outfit Yap.
As with all Amazon devices, the goal is, in part, to make it easier to buy things. Another Amazon gadget, the Dash, allows Amazon Fresh members to scan bar codes and also speak voice commands to add items to their shopping lists. To field voice queries, the Dash uses the same backend cloud service as Echo.
Amazon appears to be moving cautiously with Echo. The device costs $199, but customers have to apply for one, and it will be sent out selectively for now. The company must first make sure Echo is efficiently answering queries and fulfilling its ambitious promise—that it can field and respond to queries from across the room. Amazon is also likely seeking to avoid the same situation it entered with the Fire Phone, when it was caught with a disastrous glut of excess inventory and had to take a $170 million writedown.
Michael Pachter, an analyst at Wedbush Securities, said he doesn’t understand why people might be tempted to purchase Echo. “I think it’s just a two-way speaker, but why isn’t there an app that lets me do the same thing without having to spend $99 on hardware?” he said. “I think this is a solution that is seeking a problem.”
