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Alexa, with your new calling feature, what’s the point of a landline?

Echo Dot, White, Shelf

Amazon has taken its smart home move up a level (re)entering into the calling and text market, potentially piling further misery on the telcos who are continuing with an identity-crisis in the digital economy.

The eCommerce giant has now introduced Echo Show, which includes a seven-inch video screen, as well as Alexa Calling, a free calling and messaging service which can be used over all Echo devices and Alexa apps. The Fire Phone might have been a failed venture into the world of telecommunications, however that effort does not seem to have singed the ambitions of the Amazon team, for which diversification is becoming the regular word of the day.

It certainly is an interesting idea, albeit one with severe limitations for the moment, and there is definitely room to grow in the market considering the cash Amazon is throwing behind the Echo devices. The team may not be able to monetize this ambition in any monumental fashion, but it serves the purpose of making the Echo indispensable in the smart home.

If you put enough useful, free features into the device, it will become accepted through convenience, providing victory for that consumer in the battle for the living room. It’s a play on the Swiss Cheese Model; if you layer up enough features, eventually you will attract the interest of each consumer depending on their wants and needs in the home. Tech nerds have been targets, lazy people next, now ones who are from a generation where they desire a landline, though there are fewer and fewer of those bumping around.

Telcos will always have line rental as a means to generate revenues, but the archaic landline was a useful little revenue earner for those who still have it. Considering the mass penetration of mobile devices, the landline is fast becoming redundant, though the nostalgia of having a physical device might play a role. The Echo devices could be a useful alternative.

On the mobile side of things, it’s a further kick in the teeth for Voice and SMS revenues, as simply saying ‘Alexa, call Mum’ is certainly a simpler task than remembering where you left your phone. The (re)entry is anything but a guaranteed success for Amazon, though it is another ominous sign for the telcos.

That said, there are still a huge number of limitations for Amazon. Currently, you are only able to call or message contacts who also have an Echo device set up, or alternatively, the Alexa app on their smartphone. It’s the same limitation as WhatsApp or Facebook video calling features, but who doesn’t have WhatsApp or Facebook? Unless you have an Echo device, it is highly unlikely you will have the Alexa app, therefore Amazon is pinning success on a relatively niche audience of smart home early adopters for the moment.

Secondly, there have not been any indications on how the data is stored after the action, or encrypted in transit, or whether there is the option to delete the data from Amazon data centres. For those who are more security conscious, this might be a significant stumbling block. The team should look to address this omission, or at least provide transparency in the near-enough future.

Telcos probably won’t be worried too much for the moment as it is an offering designed for a limited audience currently, though the same was said about OTT players such as WhatsApp. Amazon most likely doesn’t want to challenge the telcos directly as this appears to be another small, incremental value add to make the Echo device indispensable to the digital native, but there is potential for some collateral damage here.

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One comment

  1. Chuck Napier 10/05/2017 @ 3:01 pm

    Fairly easy for Amazon to add a feature to the Alexa app to ask permission for access to contacts list in your smartphone. Then you don’t need to search for your phone when you want to call someone, just Ask Alexa and be near the Alexa microphone when at home. Likewise, for receiving calls, Alexa could use Bluetooth connection, so you just need to be near Alexa to answer. Amazon is going for convenience and dependence on Alexa.

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