Why is Amazon’s fourth pillar AI and logistics?
AsiaIndustrial NetNews: In more than 20 years of history, Amazon’s identity has been stacked. It was first a book sales company, then an e-commerce giant, and now a cloud computing giant. And according to a new report from CBInsights, the next self-definition that Amazon is going to add will likely come from its development in artificial intelligence and logistics.
Amazon has always declared that the pillars of its business are: retail market, Amazon Prime service, AWS cloud computing. Many are now speculating about what its fourth pillar will be, and artificial intelligence, marked by Amazon’s digital assistant Alexa, seems the most likely candidate. In addition, logistics also supports many of Amazon’s businesses, and a series of creative delivery methods have gradually become its characteristic elements, making it another strong candidate.
The CB Insights report points out that Amazon has had several hardware failures, most notably the Fire phone. But it has also won accolades on hardware, such as the Kindle, and the Alexa smart voice device that is more representative of the smart future.
Data shows that Alexa devices like Amazon’s Echo are not profitable and are losing money, with losses of $300 million in 2016, which may increase to $600 million in 2017. But despite this, it has emerged as a leader in the digital assistant competition. That’s thanks in part to opening Alexa to developers in 2015, encouraging them to develop more skills for the device. Amazon itself has more than 1,000 employees dedicated to the Echo and Alexa ecosystem. Alexa now has over 10,000 skills.
And according to previous reports, Amazon also recently opened up the far-field microphone technology and voice processing technology behind Alexa, allowing third-party hardware manufacturers to develop Alexa-enabled devices.
CBIsights believes that funding Alexa-driven hardware is a one-off move, which can win over both consumers and developers and form its own ecosystem. Amazon has also said it doesn’t want to bet all on hardware. Instead, its ultimate goal is to make cloud-based voice software ubiquitous, ruling everything from car consoles to consumer wearables.
Even in medical care, Amazon has teamed up with the pharmaceutical company Merck to develop a new skill for Alexa that can help diabetics check their blood sugar levels.
Amazon also has a venture capital fund, the Alexa Fund, which focuses on building Alexa into a general-purpose artificial intelligence assistant, investing in potential developers and hardware.This fund has already invested in householdsautomationThe company Ecobee, the baby monitoring device company Owlet Baby Care, the smart doorbell company Ring, the gesture control company Thalmic Labs, etc. To some extent, these companies can be classified as smart home, and this is the biggest application scenario of Alexa.
In an open letter to shareholders in April this year, Amazon CEO Jeff Bezos talked up artificial intelligence and machine learning, saying that this is the company’s new focus, which can help improve its presence and dominate the competition, and among them voice, virtual assistants, and natural language processing are especially important.
The report also noted that while Alexa represents the most likely future, online retail remains at the heart of Amazon’s core. After all, this segment generates more revenue than any other service, followed by third-party seller marketplaces and Prime subscriptions.
Amazon has spent a lot of effort in recent years to speed up delivery by building a logistics network, which also means further consolidating its control of the online retail throne. It continues to build warehouses across the U.S., where 44 percent of people in the U.S. now live within 20 miles of an Amazon warehouse, up from just 5 percent in 2015, according to The Wall Street Journal.
In addition to warehouses, Amazon is also leasing planes and building a fleet of express fleets. Of course, Amazon’s drone delivery should also be mentioned here.
All of these layouts, can be shown in Amazon patents or patent pending technology types. According to statistics, it applied for 248 patents in 2009, and by 2013 this number climbed to more than 1,100. Still, that’s nowhere near a tech giant like Google, which filed roughly three times more patents in that time frame.
Although it will take several years for a large amount of patent data to become public, the report shows that Amazon’s patent activity in 2016 was mainly concentrated in the field of logistics network and cloud computing. From existing data, CB Insights found that Amazon applied for 78 logistics-related patents in 2016, much higher than in the past few years.
But many patents are too futuristic, and it’s hard to say how many will translate into actual tools. Amazon, for example, also wants to patent these ideas: an airborne distribution network from which drones can be launched directly, an underwater warehouse, and combining small drones into one large drone.
Hiring is also a key indicator of Amazon’s current and future direction. The report notes that AWS has more hiring demand than any other sector, with about 5,600 open positions, accounting for one-third of all available positions. But the Alexa team has about 890 job openings, or about 5% of all jobs.
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