Please ensure Javascript is enabled for purposes of website accessibility Is Making a Big Push With Alexa

By Evan Niu, CFA – Mar 3, 2016 at 2:30PM

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Is Apple falling behind in the virtual assistant market?

Amazon Tap. Image source: Amazon.

You could say that (AMZN -1.08%) is taking a page out of Apple's (AAPL 0.19%) playbook.

The Mac maker always maintains that it doesn't care to be the first to market -- it would rather be the best in the market. That philosophy has played out in music players, smartphones, and tablets, among other product categories. Even in the early innings of the smartwatch market, Apple Watch lagged Android rivals by a year but is now already dominating the market.

How about the virtual assistant market, though?

Last but not least
Apple was the first of the big tech players to jump into the virtual assistant market in 2011 with Siri, which it acquired the prior year. Former software chief Scott Forstall was the driving force behind the move, believing that voice-powered virtual assistants could create an entirely new paradigm for how we interact with our computing devices. Yet, five years later Siri is still arguably more of a novelty than a useful tool with daily applications. To be fair, Apple is still working on improving Siri's capabilities, being a headline feature of the new Apple TV and likely coming to the Mac later this year.

Siri interface. Image source: Apple.

Amazon didn't launch its Echo speaker, the first device with Alexa, until 2014. It started as a limited release only available to Prime members by invitation, but Echo is now widely available. The e-commerce company just recently unveiled two new Alexa-enabled devices, the Echo Dot and Amazon Tap. Each has a unique position in the market, and this is now what Amazon's Alexa family looks like:




Echo Dot


Small puck that you plug speakers into

Amazon Tap


More affordable portable wireless speaker



Flagship stationary wireless speaker

Data source: Amazon.

I'm not sure why Amazon didn't just stick with the Echo branding for the Amazon Tap, which seems simple from a product branding standpoint. In any event, each device has a specific value proposition at a specific price point. Echo Dot offers a low price of admission and works with third-party speakers. Amazon Tap is portable and a little bit more rugged. Echo has a nicer build quality and offers always-on capabilities since it stays plugged in.

Developers, developers, developers
But most important, Amazon has made a big push to open up Alexa as a platform, releasing a software development kit, or SDK, last year. This allows third-party developers to truly tap into Alexa's capabilities and innovate in a more independent manner. You can now order a pizza from Domino's or a car from Uber. There's also still a lot of potential with controlling connected "smart home" devices, something that Apple touted with Siri at WWDC 2015 with HomeKit but has yet to make meaningful progress on.

In contrast, Apple has not opened up Siri APIs in a way that truly promotes third-party innovation. Apple added a new search API for Siri last year alongside deep linking, but its access to third-party apps is somewhat limited in terms of its scope. And some of Siri's direct third-party integrations require a lot more collaboration on Apple's part. Third-party developers can't just run with it on their own.

Siri may not be a flagship selling feature of the iPhone, but at the same time virtual assistants are closely linked to the burgeoning field of artificial intelligence that will inevitably be quite important to future computing platforms. Amazon might have just stolen the virtual assistant show.

Evan Niu, CFA owns shares of Apple. The Motley Fool owns shares of and recommends and Apple. 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.

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