We always knew this day would come. Over the years, Amazon.com (NASDAQ:AMZN) has been quietly scooping up voice recognition and virtual assistant start-ups, signaling that the e-commerce giant would inevitably enter the virtual assistant race kicked off in earnest by Apple's Siri in 2011.
Amazon scooped up Yap in 2011, followed by IVONA Software and Evi in 2013. While most observers would naturally assume that Amazon was planning to introduce a virtual assistant in its mobile devices to compete with Siri, Google Now, or Microsoft Cortana, it looks like the company is taking an entirely different approach.
Say hello to Amazon Echo
Echo is a small svelte device that looks just like a wireless speaker. It has a blue LED ring at the top with a couple of buttons, and is activated by saying a specific "wake word." Amazon uses "Alexa" as the wake word by default, but the introductory video suggests that users can choose their own wake word. That resembles the voice activation approach that Apple and Google have been using with "Hey, Siri" and "Ok, Google."
The device does indeed function as a wireless speaker using Bluetooth, and it has seven microphones inside that use far-field voice recognition and noise cancellation to hear users from longer distances.
As far as features go, everything you'd expect from a modern virtual assistant is here, including weather forecasts, news updates, music playback, and more. Of course, Echo can also add things to your Amazon shopping list upon command. Echo also has a companion app for Fire OS and Android, while iPhone or desktop users will need to use a browser-based Web app for now.
Right now, Echo is available by invitation only. It retails for $199, but Prime members can buy one for $99 under a limited time promotion.
Can you hear me now?
To be clear, Echo represents a differentiated approach to how other tech giants are tackling virtual assistants. While Apple, Google, and Microsoft are integrating their respective assistants into their respective mobile devices, Amazon is taking a stand-alone approach.
This is smart because Amazon doesn't have a particularly large installed based of mobile devices compared to iOS and Android. The Kindle Fire tablet family has done very well historically, at least according to third-party estimates, but the new Fire Phone quickly flopped. The trade-off is that it's unclear if the average consumer values the virtual assistant value proposition enough to pay for a stand-alone device.
Considering this uncertainty, Amazon may have a tough time with Echo at $199, but $99 seems much more viable. Fortunately, Amazon does have "tens of millions" of Prime members that should be eligible for the reduced price. Unlike the Fire Phone, Amazon does have a shot at succeeding with Echo.
Evan Niu, CFA owns shares of Apple. The Motley Fool recommends Amazon.com, Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Amazon.com, Apple, Google (A shares), Google (C shares), and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.