This story was delivered to Business Insider Intelligence Apps and Platforms Briefing subscribers hours before appearing on Business Insider. To be the first to know, please click here.
Amazon is preparing to release three new updates to Alexa to reduce the friction associated with the platform, Ruhi Sarikaya, who heads the Alexa Brain group, announced last week.
This is important because, although Amazon has an early lead in the voice assistant and smart speaker market — Amazon commanded a 72% share of the total US installed base of smart speakers in 2017 — recurrent updates to the platform will help the company sustain dominance as new competitors enter the space.
Here’s how Amazon is enabling more natural interaction with Alexa to fuel consumer engagement with the platform:
- Making it easier to discover and engage with skills using natural phrases and requests. Amazon is introducing a new Alexa capability called Skills Arbitration to enable Alexa users to automatically find, enable, and launch skills using natural phrases and requests via machine learning. As discovery of Alexa skills becomes increasingly harder with the addition of more skills — there are currently 40,000 Alexa skills — Skills Arbitration will become progressively more important for consumers and developers.
- Improving contextual awareness in follow-up questions for more natural conversations. Alexa’s new Context Carryover feature enables the voice assistant to understand and follow conversational questions and follow-up questions, without having to repeat the “Alexa” wake-up word. For instance, Alexa users can say “Alexa, how is the weather in New York?” and follow up with “What about this weekend?” or “How long does it take to get there?”
- Allowing users to offload important information to Alexa.The new memory feature will enable Alexa to store arbitrary information, like important dates the user previously discussed, and recall that information later on. For example, users can ask Alexa to remember a friend’s birthday and order flowers for delivery that day. Google Assistant boasts a similar memory feature.
The latest announcements could aid Amazon in bolstering usage of its voice assistant platform. At the moment, voice assistants are used primarily for activities like checking the weather, receiving news updates, or making calls. The development of new experiences that expand voice assistants' ability to complete more complex interactions will likely help voice assistants and smart speakers occupy a growing amount of consumers' time.
The voice app ecosystem is booming. In the US, the number of Alexa skills alone surpassed 25,000 in January 2018, up from just 7,000 the previous January, in categories ranging from music streaming services, to games, to connected home tools.
As voice platforms continue to gain footing in homes via smart speakers — connected devices powered primarily by artificial intelligence (AI)-enabled voice assistants — the opportunity for voice apps is becoming more profound. However, as observed with the rise of mobile apps in the late 2000s, any new digital ecosystem will face significant growing pains, and voice apps are no exception. Thanks to the visual-free format of voice apps, discoverability, monetization, and retention are proving particularly problematic in this nascent space. This is creating a problem in the voice assistant market that could hinder greater uptake if not addressed.
Business Insider Intelligence, Business Insider's premium research service, has written a detailed report on voice apps that explores the two major viable voice app stores. It identifies the three big issues voice apps are facing — discoverability, monetization, and retention — and presents possible short-term solutions ahead of industry-wide fixes.
Here are some of the key takeaways from the report:
- The market for smart speakers and voice platforms is expanding rapidly. The installed base of smart speakers and the volume of voice apps that can be accessed on them each saw significant gains in 2017. But the new format and the emerging voice ecosystems that are making their way into smart speaker-equipped homes is so far failing to align with consumer needs.
- Voice app development is a virtuous cycle with several broken components. The addressable consumer market is expanding, which is prompting more brands and developers to developer voice apps, but the ability to monetize and iterate those voice apps is limited, which could inhibit voice app growth.
- Monetization is only one broken component of the voice app ecosystem. Discoverability and user retention are equally problematic for voice app development.
- While the two major voice app ecosystems — Amazon's and Google's — have some Band-Aid solutions and workarounds, their options for improving monetization, discoverability, and retention for voice apps are currently limited.
- There are some strategies that developers and brands can employ in the near term ahead of more robust tools and solutions.
In full, the report:
- Sizes the current voice app ecosystem.
- Outlines the most pressing problems in voice app development and evolution in the space by examining the three most damning shortcoming: monetization, discoverability, and retention.
- Discusses the solutions being offered up by today's biggest voice platforms.
- Presents workaround solutions and alternative approaches that could catalyze development and evolution ahead of wider industry-wide fixes from the platforms.
Interested in getting the full report? Here are two ways to access it:
- Subscribe to an All-Access pass to Business Insider Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >>Learn More Now
- Purchase & download the full report from our research store. >> Purchase & Download Now