Speaker 1: Bloomberg Audio Studios, podcasts, radio news panels.
Speaker 2: The way that I look at this is that this
Speaker 2: is the first generation of Amazon hardware that has your
Speaker 2: fingers on it right and as a place to start,
Speaker 2: can we talk a bit about the hardware innovation, the
Speaker 2: areas that you feel are most important here in this generation.
Speaker 1: Yeah, I think this is a first. It's an incredible
Speaker 1: team that's building these products, and these products are designed
Speaker 1: from the silicon up. Quite literally, this is custom silicon
Speaker 1: built for the Alexa products. But there's also a focus
Speaker 1: right now on the sensing capabilities from the camera to
Speaker 1: the microphone to just presence detection through Wi Fi. It's
Speaker 1: really important because you can start enabling these productive scenarios.
Speaker 1: The other thing is great sound like ED is so
Speaker 1: important for our customers, like just filling your house with sound.
Speaker 1: I think sometimes we forget the emotion of music or
Speaker 1: how clear you want to have that conversation back and forth.
Speaker 1: So each one of these details is kind of thought through.
Speaker 1: These products are built from the ground up, but this
Speaker 1: team has just literally pushed through every detail.
Speaker 2: I think about this at a time where we are
Speaker 2: in a voice assistant or voice based generative AI era right.
Speaker 2: As you know. I have an Alexa device in almost
Speaker 2: every single room of my house. But when I think
Speaker 2: about the Genai, which is I'm always by the way
Speaker 2: right it is. But here's the thing, the Genai tools
Speaker 2: that I'm using every single day, I go to my
Speaker 2: smartphone because it's on my person. There isn't something that
Speaker 2: the Alexa device can do with the same immediacy. Maybe
Speaker 2: you disagree that my funbs can do. So what is
Speaker 2: it about this generation of hardware that makes those form factors,
Speaker 2: the echo devices and the range of other things the
Speaker 2: right form factor for this era.
Speaker 1: It's a good question. It's a good question. First, the
Speaker 1: the new Alexa Alexa Plus is powered by AI, so
Speaker 1: it's LLM backed, if you will, so limitless knowledge, limitless understanding,
Speaker 1: and you can have any conversation. It's quite conversational. So
Speaker 1: when you talk about what you're typing into a phone,
Speaker 1: one of the things I like talking about is maybe
Speaker 1: even a little easier now ed because you have all
Speaker 1: that kind of infra, you literally can just speak. I
Speaker 1: call it amby as a team call it ambient AI,
Speaker 1: and we believe that your Eco device is right now
Speaker 1: as you light them up with Alexa plus, just have
Speaker 1: any conversation at any time. I think you're something quite powerful
Speaker 1: about that too. Where a lot of times we take
Speaker 1: out our phone, we get distracted. I'm at the dinner
Speaker 1: table with my kids. We have this idea that we
Speaker 1: want to keep our phones down right because we want
Speaker 1: to be present with each other. And there's so many
Speaker 1: times where you pull out your phone to answer a question.
Speaker 1: Almost like you just said, but now it's just changed,
Speaker 1: it's completely different. Just say, Alexa have the conversation. It's
Speaker 1: quite literally all the information there and it's conversational. Not
Speaker 1: only that, she can then get the next thing done
Speaker 1: for you. Let's say you have a conversation, you want
Speaker 1: to talk a little bit more about what's happening and
Speaker 1: what do we think about what's happening tomorrow. You just
Speaker 1: add it to your calendar right there, and then just
Speaker 1: with your voice, it's distraction free, it's ambient, and it's
Speaker 1: so fun because you're just engaged in a totally different
Speaker 1: way with your voice.
Speaker 2: Just as you said, Alexa plus is listening more contextually,
Speaker 2: it is listening more intelligently. Yeah, how do you build
Speaker 2: trust with the customer consumer base knowing its capabilities.
Speaker 1: We've been doing it for ten plus years. This is
Speaker 1: what we are one hundred percent focused on for our
Speaker 1: customers the end of the day. The way you do
Speaker 1: that is you give your customers full control, full control,
Speaker 1: opt in, opt out, remember what you want do just
Speaker 1: literally control your data for yourself. Plus, everything to Amazon
Speaker 1: is anonymised, so we don't really have any info. So
Speaker 1: at the end of the day, it's up to you
Speaker 1: and what you do with your product. And I think
Speaker 1: that's what the answer is. That's you give customer full control,
Speaker 1: and we do. We're very proud of that, Like, that's
Speaker 1: a big deal for us.
Speaker 2: Is there like a generational divide in the Alexa user
Speaker 2: base and how does this generation of hardware change that?
Speaker 2: In other words, is there just a group of people
Speaker 2: in society that are going to come to AI enabled
Speaker 2: devices for the first time here? And if so, for
Speaker 2: what reason?
Speaker 1: We do think so? We do think so a couple
Speaker 1: of reasons. One, you know these are objects and you
Speaker 1: know they're beautiful. This matter is like when you buy
Speaker 1: something and something you covet, something you wanted, and you
Speaker 1: go after because it's so useful and it can get
Speaker 1: so much done for you. And it has that depth
Speaker 1: of knowledge. We do think there's a whole new customer
Speaker 1: base coming in for Alexa to go use Alexa Plus.
Speaker 1: That's why these products were designed and maybe to your
Speaker 1: first question, like thought all the way through, including how
Speaker 1: it fits in your home or how it fits in
Speaker 1: your apartment where it just seamlessly fits in, and then
Speaker 1: with the beautiful sound that comes off of it, that
Speaker 1: elegance of just contextual understanding. Combine those things and you
Speaker 1: end up with a whole new category of device for people,
Speaker 1: which then leads you to a whole new customers set.
Speaker 1: I'm pretty pumped about it.
Speaker 2: Panas s Bloomberg's Mark Gumman has written, and it's based
Speaker 2: in part on a conversation with you, that Amazon's overhauling
Speaker 2: its device is to take on Apple in this AI era.
Speaker 2: Do you agree with that?
Speaker 1: I haven't seen it. Can I say that? Let me
Speaker 1: read that article that Well, here's what I'd say. We
Speaker 1: build our products for our customers and for people. My
Speaker 1: whole goal is quite simple. We want AI to be
Speaker 1: useful for people, end of story. And I think we're
Speaker 1: building devices to do just that. And I do believe
Speaker 1: they're beautiful. I think they fit in the home. I
Speaker 1: think they're so well thought through that when people use
Speaker 1: these devices said they're gonna love them, They're just gonna
Speaker 1: love them. I can't like this is something I just
Speaker 1: want people to get their hands on them.
Speaker 2: The way that we could look at this bigger picture
Speaker 2: is that the Echo family at least has always had
Speaker 2: an element of affordability. And I know that you also
Speaker 2: want to look broader at premium products too, So how
Speaker 2: do you balance the signature premium while keeping that sort
Speaker 2: of historic affordability of what Echo is represented to date.
Speaker 1: You essentially build products for every customer. That's how you
Speaker 1: do it. Like we have products that started forty nine
Speaker 1: dollars and can go up to four ninety nine, and
Speaker 1: you know, you can think about price point, but then
Speaker 1: you also think about feature set. We want everybody to
Speaker 1: have that great experience, but they can do it at
Speaker 1: the price point that that suits them best, and you
Speaker 1: know they're at that point when you're able to kind
Speaker 1: of encompass, then you know you have something for everybody.
Speaker 1: That's that's really a big deal for us, and we'll
Speaker 1: continue to build not only affordable products, but also beautiful products.
Speaker 1: We in essence we wrap that in a package that
Speaker 1: we just say, we just need to make great products
Speaker 1: for people.
Speaker 2: Panas how many people are paying actively for Alexa plus
Speaker 2: and how many of them are using it just through
Speaker 2: their Prime Prime platform subscription or entitlement.
Speaker 1: We're not quite there yet. Ed, we're still in early access.
Speaker 1: So in early access, nobody right now is actually paying.
Speaker 1: They're just using it. We're getting the feedback, we're seeing
Speaker 1: incredible engagement. You know. We we have over ten million
Speaker 1: people have access to it right now. It's pretty awesome
Speaker 1: though to see how they're using it. But right now,
Speaker 1: because it's an early access, So I go back to
Speaker 1: we're not charging.
Speaker 2: I go back to the root of my question, which
Speaker 2: is on the hardware innovation. Right the choice that a
Speaker 2: consumer will have is is the need to pay twenty
Speaker 2: dollars a month for Alexa Plus. They might have older
Speaker 2: generations of now obsolete Amazon hardware. Is upgrading to this
Speaker 2: new generation absolutely necessary to access all that Alexa plus
Speaker 2: has to offer?
Speaker 1: Absolutely not. You can, like, we design the product to
Speaker 1: work back to products all the way back to twenty sixteen,
Speaker 1: and so that is like a ninety nine or so
Speaker 1: percent of our customer base right now ed this was
Speaker 1: really important point. If we're going to have AMBIENTAI where
Speaker 1: people can just talk to Alexa plus anywhere. It wasn't
Speaker 1: about just replacing products. That said, the new hardware is awesome,
Speaker 1: and we really do want people to experience the next
Speaker 1: generation of it. These products are faster, they fit seamlessly
Speaker 1: into your home. The sound is amazing, the microphone is amazing,
Speaker 1: the sensing is amazing, and so to really get the
Speaker 1: best experience, for sure, the new hardware leads you there.
Speaker 1: And that's what today was all about. But I also
Speaker 1: want to tell you, like, this is all about customers
Speaker 1: and doing everything we can for them, and part of
Speaker 1: that is making sure that they have access to Alexa
Speaker 1: Plus in their homes right now if they choose to.
Speaker 2: If it's about the customers. Now that you've had some
Speaker 2: time in this role, and I know you think so
Speaker 2: deeply about everything from supply chain through to the product itself,
Speaker 2: the in housework on silicon, we've been over that. But
Speaker 2: is there a pressure to make this device's businesses a
Speaker 2: division profitable or is it not necessary if there is
Speaker 2: some bigger picture goal here, Yeah, no.
Speaker 1: It's it is about it is well first there's you know,
Speaker 1: there's a lot of different device businesses, so you know,
Speaker 1: but also it is about making you know, creating the
Speaker 1: next big business for Amazon, and you know, we see
Speaker 1: that growth and we're pretty excited about it.
Speaker 2: Panos, there was actually a really large range of things, right,
Speaker 2: I think you're you're alluding to Ring as being one
Speaker 2: of the the the offerings today right across the broad
Speaker 2: range of of hardware domains in product line. You know,
Speaker 2: if there is one single device that is most important
Speaker 2: that you've gone through today, which is it? Please?
Speaker 1: You can't please? Yeah? Well, and it's like asking me
Speaker 1: what it's like asking you what my favorite who my
Speaker 1: favorite child is that I have for of them? I
Speaker 1: made that mistake once quite literally, and I have to
Speaker 1: tell you, like, I mean, these products are all pretty amazing.
Speaker 1: I think the Ring product family is stunning right now.
Speaker 1: In four K. Kindle is a product that I'm in
Speaker 1: love with every day and use every day alongside Ring,
Speaker 1: and then the Eco devices are also lighting things up.
Speaker 1: Fire TV is used by hundreds of millions of people.
Speaker 1: So picking is a little bit tricky for me. It's
Speaker 1: like picking my favorite is something I don't I definitely
Speaker 1: don't want the team to team to say, so I'm
Speaker 1: going to say like I think, I think, I'm going
Speaker 1: to treat that and hold them all up equally as
Speaker 1: most as important as Really it does come down to
Speaker 1: how they all connect together. So that's real. It does.
Speaker 2: As you've explained, Panos, it is a broad offering with
Speaker 2: lots of different subcategories, and I appreciate you taking the
Speaker 2: time and going so deep on it with me, Panels
Speaker 2: Pana the device is chief Amazon really grateful for your time.