Getting Chatty Apple will lose in the era of personal digital assistants

Amazon and Google are poised to win because they're focused on AI technology whereas Apple is unwisely clinging to hardware.
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In early 2010, Steve Jobs was wearing a black turtleneck and holding a paper coffee cup when he humbly announced the beginning of a new era from the stage of a major technology conference. He called it the “post-PC era.” An era when desktop computers and laptops would fade into the background. Mr. Jobs believed the world was entering the era of the tablet, shortly after Apple – his company – had introduced the iPad.

He was right to some extent – PC sales have fallen since 2011. And just a few years later, Google would complete more searches for mobile platforms than PCs. The era in which PCs were the doorway to digital services was literally over.

But now we know that tablets didn’t become the most important devices for accessing the mobile internet. That honor goes to smartphones. Users grab their devices hundreds of times a day. The devices inform. They entertain. They distribute. They have become the cornerstone of private and business communication from the moment our eyes open until late into the night.

Now the time has come to acknowledge a new era, a time when the influential devices begin suffering from falling sales. The final quarter of 2017 was the first time smartphone sales fell.

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This could be the beginning of a phase that brings even more change than the smartphone ever did. People will have to learn new ways of interacting with computers because they no longer have to hold them to use digital services. Also because they have to divulge every last detail of their private lives for the technology to work properly.

Smartphones won’t disappear during this era, just as the PC hasn’t vanished since Steve Jobs held that coffee and wore that turtleneck. But the smartphone will slip in significance.

This is the era of the voice-activated assistant, which surrounds and constantly listens to its user without them having to touch a single button or screen. They remove the internet from hardware. The assistants sometimes speak to users through a connected speaker, sometimes through a watch and even from a car’s computer.

This new era is no longer so much about the devices – it’s about the artificial intelligence behind the devices. And it’s sparked a global arms race among technology companies such as Amazon, Apple and Google. Their voice-activated assistants are programmed to constantly listen to humans in order to answer questions at just the right moment, complete shopping lists or just talk about the weather.

It’s only logical that Mr. Bezos is already thinking about sending customers things they didn’t order – but probably already need.

If they have the right gear, users can already switch on their coffee machine while still in bed, dim the hall light and change the channel on their TV. Amazon and its Echo speaker, home to the Alexa assistant, are the most advanced. Google’s Google Home is similar as is Apple’s HomePod. Microsoft has the Cortana assistant and Deutshe Telekom’s entry in the sector is Hallo Magenta.

Microsoft was once the king of the PC era – but was dethroned by the mobile internet and Apple. Then came Google and Samsung. Now the throne is awaiting its new ruler and Amazon and Google – not Apple – have the lead in dominating the era of personal digital assistants in Europe and the US. The reason: Differing corporate philosophies. At Apple, the HomePod itself, its design and its sound are the focus while at Amazon and Google, it’s the learning software.

Apple primarily makes its money with hardware. But Amazon and Google earn money with information about their users, which is why Amazon speakers are much cheaper than Apple’s HomePod.

And the more Amazon gets to know about its customers, the better it will be able to accomodate them. It’s only logical that Mr. Bezos is already thinking about sending customers things they didn’t order – but probably already need.

Every user that trains the software makes it better and improves the competitive advantage. Mr. Bezos knows this and has allowed manufacturers of refrigerators, TVs and heaters to integrate Alexa into their devices. Meanwhile Apple’s Siri is only listening to owners of Apple devices.

Companies are filling the last remaining holes in their knowledge about their customers with digital assistants that are hoping to become just another part of the family. The only question that remains is if the customers will play along; judging by the latest sales figures, it looks like they will.

The author is deputy editor-in-chief of Handelsblatt. To reach the author: [email protected]