WEBVTT - Amazon's Panay Talks New Devices & AI

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news panels.

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<v Speaker 2>The way that I look at this is that this

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<v Speaker 2>is the first generation of Amazon hardware that has your

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<v Speaker 2>fingers on it right and as a place to start,

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<v Speaker 2>can we talk a bit about the hardware innovation, the

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<v Speaker 2>areas that you feel are most important here in this generation.

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<v Speaker 1>Yeah, I think this is a first. It's an incredible

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<v Speaker 1>team that's building these products, and these products are designed

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<v Speaker 1>from the silicon up. Quite literally, this is custom silicon

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<v Speaker 1>built for the Alexa products. But there's also a focus

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<v Speaker 1>right now on the sensing capabilities from the camera to

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<v Speaker 1>the microphone to just presence detection through Wi Fi. It's

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<v Speaker 1>really important because you can start enabling these productive scenarios.

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<v Speaker 1>The other thing is great sound like ED is so

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<v Speaker 1>important for our customers, like just filling your house with sound.

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<v Speaker 1>I think sometimes we forget the emotion of music or

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<v Speaker 1>how clear you want to have that conversation back and forth.

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<v Speaker 1>So each one of these details is kind of thought through.

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<v Speaker 1>These products are built from the ground up, but this

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<v Speaker 1>team has just literally pushed through every detail.

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<v Speaker 2>I think about this at a time where we are

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<v Speaker 2>in a voice assistant or voice based generative AI era right.

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<v Speaker 2>As you know. I have an Alexa device in almost

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<v Speaker 2>every single room of my house. But when I think

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<v Speaker 2>about the Genai, which is I'm always by the way

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<v Speaker 2>right it is. But here's the thing, the Genai tools

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<v Speaker 2>that I'm using every single day, I go to my

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<v Speaker 2>smartphone because it's on my person. There isn't something that

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<v Speaker 2>the Alexa device can do with the same immediacy. Maybe

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<v Speaker 2>you disagree that my funbs can do. So what is

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<v Speaker 2>it about this generation of hardware that makes those form factors,

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<v Speaker 2>the echo devices and the range of other things the

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<v Speaker 2>right form factor for this era.

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<v Speaker 1>It's a good question. It's a good question. First, the

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<v Speaker 1>the new Alexa Alexa Plus is powered by AI, so

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<v Speaker 1>it's LLM backed, if you will, so limitless knowledge, limitless understanding,

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<v Speaker 1>and you can have any conversation. It's quite conversational. So

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<v Speaker 1>when you talk about what you're typing into a phone,

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<v Speaker 1>one of the things I like talking about is maybe

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<v Speaker 1>even a little easier now ed because you have all

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<v Speaker 1>that kind of infra, you literally can just speak. I

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<v Speaker 1>call it amby as a team call it ambient AI,

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<v Speaker 1>and we believe that your Eco device is right now

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<v Speaker 1>as you light them up with Alexa plus, just have

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<v Speaker 1>any conversation at any time. I think you're something quite powerful

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<v Speaker 1>about that too. Where a lot of times we take

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<v Speaker 1>out our phone, we get distracted. I'm at the dinner

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<v Speaker 1>table with my kids. We have this idea that we

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<v Speaker 1>want to keep our phones down right because we want

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<v Speaker 1>to be present with each other. And there's so many

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<v Speaker 1>times where you pull out your phone to answer a question.

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<v Speaker 1>Almost like you just said, but now it's just changed,

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<v Speaker 1>it's completely different. Just say, Alexa have the conversation. It's

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<v Speaker 1>quite literally all the information there and it's conversational. Not

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<v Speaker 1>only that, she can then get the next thing done

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<v Speaker 1>for you. Let's say you have a conversation, you want

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<v Speaker 1>to talk a little bit more about what's happening and

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<v Speaker 1>what do we think about what's happening tomorrow. You just

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<v Speaker 1>add it to your calendar right there, and then just

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<v Speaker 1>with your voice, it's distraction free, it's ambient, and it's

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<v Speaker 1>so fun because you're just engaged in a totally different

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<v Speaker 1>way with your voice.

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<v Speaker 2>Just as you said, Alexa plus is listening more contextually,

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<v Speaker 2>it is listening more intelligently. Yeah, how do you build

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<v Speaker 2>trust with the customer consumer base knowing its capabilities.

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<v Speaker 1>We've been doing it for ten plus years. This is

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<v Speaker 1>what we are one hundred percent focused on for our

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<v Speaker 1>customers the end of the day. The way you do

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<v Speaker 1>that is you give your customers full control, full control,

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<v Speaker 1>opt in, opt out, remember what you want do just

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<v Speaker 1>literally control your data for yourself. Plus, everything to Amazon

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<v Speaker 1>is anonymised, so we don't really have any info. So

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<v Speaker 1>at the end of the day, it's up to you

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<v Speaker 1>and what you do with your product. And I think

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<v Speaker 1>that's what the answer is. That's you give customer full control,

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<v Speaker 1>and we do. We're very proud of that, Like, that's

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<v Speaker 1>a big deal for us.

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<v Speaker 2>Is there like a generational divide in the Alexa user

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<v Speaker 2>base and how does this generation of hardware change that?

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<v Speaker 2>In other words, is there just a group of people

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<v Speaker 2>in society that are going to come to AI enabled

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<v Speaker 2>devices for the first time here? And if so, for

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<v Speaker 2>what reason?

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<v Speaker 1>We do think so? We do think so a couple

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<v Speaker 1>of reasons. One, you know these are objects and you

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<v Speaker 1>know they're beautiful. This matter is like when you buy

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<v Speaker 1>something and something you covet, something you wanted, and you

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<v Speaker 1>go after because it's so useful and it can get

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<v Speaker 1>so much done for you. And it has that depth

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<v Speaker 1>of knowledge. We do think there's a whole new customer

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<v Speaker 1>base coming in for Alexa to go use Alexa Plus.

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<v Speaker 1>That's why these products were designed and maybe to your

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<v Speaker 1>first question, like thought all the way through, including how

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<v Speaker 1>it fits in your home or how it fits in

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<v Speaker 1>your apartment where it just seamlessly fits in, and then

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<v Speaker 1>with the beautiful sound that comes off of it, that

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<v Speaker 1>elegance of just contextual understanding. Combine those things and you

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<v Speaker 1>end up with a whole new category of device for people,

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<v Speaker 1>which then leads you to a whole new customers set.

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<v Speaker 1>I'm pretty pumped about it.

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<v Speaker 2>Panas s Bloomberg's Mark Gumman has written, and it's based

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<v Speaker 2>in part on a conversation with you, that Amazon's overhauling

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<v Speaker 2>its device is to take on Apple in this AI era.

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<v Speaker 2>Do you agree with that?

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<v Speaker 1>I haven't seen it. Can I say that? Let me

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<v Speaker 1>read that article that Well, here's what I'd say. We

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<v Speaker 1>build our products for our customers and for people. My

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<v Speaker 1>whole goal is quite simple. We want AI to be

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<v Speaker 1>useful for people, end of story. And I think we're

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<v Speaker 1>building devices to do just that. And I do believe

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<v Speaker 1>they're beautiful. I think they fit in the home. I

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<v Speaker 1>think they're so well thought through that when people use

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<v Speaker 1>these devices said they're gonna love them, They're just gonna

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<v Speaker 1>love them. I can't like this is something I just

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<v Speaker 1>want people to get their hands on them.

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<v Speaker 2>The way that we could look at this bigger picture

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<v Speaker 2>is that the Echo family at least has always had

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<v Speaker 2>an element of affordability. And I know that you also

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<v Speaker 2>want to look broader at premium products too, So how

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<v Speaker 2>do you balance the signature premium while keeping that sort

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<v Speaker 2>of historic affordability of what Echo is represented to date.

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<v Speaker 1>You essentially build products for every customer. That's how you

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<v Speaker 1>do it. Like we have products that started forty nine

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<v Speaker 1>dollars and can go up to four ninety nine, and

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<v Speaker 1>you know, you can think about price point, but then

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<v Speaker 1>you also think about feature set. We want everybody to

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<v Speaker 1>have that great experience, but they can do it at

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<v Speaker 1>the price point that that suits them best, and you

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<v Speaker 1>know they're at that point when you're able to kind

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<v Speaker 1>of encompass, then you know you have something for everybody.

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<v Speaker 1>That's that's really a big deal for us, and we'll

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<v Speaker 1>continue to build not only affordable products, but also beautiful products.

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<v Speaker 1>We in essence we wrap that in a package that

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<v Speaker 1>we just say, we just need to make great products

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<v Speaker 1>for people.

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<v Speaker 2>Panas how many people are paying actively for Alexa plus

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<v Speaker 2>and how many of them are using it just through

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<v Speaker 2>their Prime Prime platform subscription or entitlement.

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<v Speaker 1>We're not quite there yet. Ed, we're still in early access.

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<v Speaker 1>So in early access, nobody right now is actually paying.

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<v Speaker 1>They're just using it. We're getting the feedback, we're seeing

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<v Speaker 1>incredible engagement. You know. We we have over ten million

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<v Speaker 1>people have access to it right now. It's pretty awesome

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<v Speaker 1>though to see how they're using it. But right now,

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<v Speaker 1>because it's an early access, So I go back to

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<v Speaker 1>we're not charging.

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<v Speaker 2>I go back to the root of my question, which

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<v Speaker 2>is on the hardware innovation. Right the choice that a

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<v Speaker 2>consumer will have is is the need to pay twenty

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<v Speaker 2>dollars a month for Alexa Plus. They might have older

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<v Speaker 2>generations of now obsolete Amazon hardware. Is upgrading to this

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<v Speaker 2>new generation absolutely necessary to access all that Alexa plus

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<v Speaker 2>has to offer?

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<v Speaker 1>Absolutely not. You can, like, we design the product to

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<v Speaker 1>work back to products all the way back to twenty sixteen,

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<v Speaker 1>and so that is like a ninety nine or so

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<v Speaker 1>percent of our customer base right now ed this was

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<v Speaker 1>really important point. If we're going to have AMBIENTAI where

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<v Speaker 1>people can just talk to Alexa plus anywhere. It wasn't

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<v Speaker 1>about just replacing products. That said, the new hardware is awesome,

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<v Speaker 1>and we really do want people to experience the next

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<v Speaker 1>generation of it. These products are faster, they fit seamlessly

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<v Speaker 1>into your home. The sound is amazing, the microphone is amazing,

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<v Speaker 1>the sensing is amazing, and so to really get the

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<v Speaker 1>best experience, for sure, the new hardware leads you there.

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<v Speaker 1>And that's what today was all about. But I also

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<v Speaker 1>want to tell you, like, this is all about customers

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<v Speaker 1>and doing everything we can for them, and part of

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<v Speaker 1>that is making sure that they have access to Alexa

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<v Speaker 1>Plus in their homes right now if they choose to.

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<v Speaker 2>If it's about the customers. Now that you've had some

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<v Speaker 2>time in this role, and I know you think so

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<v Speaker 2>deeply about everything from supply chain through to the product itself,

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<v Speaker 2>the in housework on silicon, we've been over that. But

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<v Speaker 2>is there a pressure to make this device's businesses a

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<v Speaker 2>division profitable or is it not necessary if there is

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<v Speaker 2>some bigger picture goal here, Yeah, no.

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<v Speaker 1>It's it is about it is well first there's you know,

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<v Speaker 1>there's a lot of different device businesses, so you know,

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<v Speaker 1>but also it is about making you know, creating the

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<v Speaker 1>next big business for Amazon, and you know, we see

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<v Speaker 1>that growth and we're pretty excited about it.

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<v Speaker 2>Panos, there was actually a really large range of things, right,

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<v Speaker 2>I think you're you're alluding to Ring as being one

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<v Speaker 2>of the the the offerings today right across the broad

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<v Speaker 2>range of of hardware domains in product line. You know,

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<v Speaker 2>if there is one single device that is most important

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<v Speaker 2>that you've gone through today, which is it? Please?

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<v Speaker 1>You can't please? Yeah? Well, and it's like asking me

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<v Speaker 1>what it's like asking you what my favorite who my

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<v Speaker 1>favorite child is that I have for of them? I

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<v Speaker 1>made that mistake once quite literally, and I have to

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<v Speaker 1>tell you, like, I mean, these products are all pretty amazing.

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<v Speaker 1>I think the Ring product family is stunning right now.

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<v Speaker 1>In four K. Kindle is a product that I'm in

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<v Speaker 1>love with every day and use every day alongside Ring,

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<v Speaker 1>and then the Eco devices are also lighting things up.

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<v Speaker 1>Fire TV is used by hundreds of millions of people.

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<v Speaker 1>So picking is a little bit tricky for me. It's

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<v Speaker 1>like picking my favorite is something I don't I definitely

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<v Speaker 1>don't want the team to team to say, so I'm

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<v Speaker 1>going to say like I think, I think, I'm going

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<v Speaker 1>to treat that and hold them all up equally as

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<v Speaker 1>most as important as Really it does come down to

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<v Speaker 1>how they all connect together. So that's real. It does.

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<v Speaker 2>As you've explained, Panos, it is a broad offering with

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<v Speaker 2>lots of different subcategories, and I appreciate you taking the

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<v Speaker 2>time and going so deep on it with me, Panels

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<v Speaker 2>Pana the device is chief Amazon really grateful for your time.