Essential Phone with Alexa FI

Essential Phone Halo Gray Ships with Alexa Installed

Essential is the new smartphone startup by Android OS inventor Andy Rubin. It is now offering an Amazon exclusive Halo Gray model that ships with the Alexa voice assistant pre-installed. This is not the first mobile phone to ship with Alexa installed, but this announcement may be good news for both Amazon and Essential.

Alexa Needs More Mobile Distribution

Amazon has done a wonderful job creating the smart speaker market from the ground up and selling over 20 million Alexa-powered devices. The Amazon Echo Show introduced another new product category, smart displays, which is another way to spread Alexa’s presence. Alexa is also accessible through dozens of home appliances. However, Alexa has a mobile problem. Google Assistant is now available to over 400 million consumers, most of that on Android devices. Amazon will struggle to reach that scale of Alexa availability anytime soon without more distribution through mobile. Getting Essential on board with an exclusive model that Amazon can promote could be a path to start expanding a mobile Alexa presence.

You can see the Amazon marketing machine starting already. The device is on sale for a $250 for a price of $449.99. There are two other Essential phone models also for sale, but you can see that Amazon has enhanced the product description for the Halo model to highlight Alexa access as well other features. This is also helpful to Amazon because the mobile division from one of its first smartphone partners, HTC, was recently acquired by Google. You can imagine that Google will not be anxious to help Alexa get more mobile distribution at the expense of Google Assistant.

You might also wonder if the Essential Home smart speaker–or is it a smart display–that was pre-announced in 2017 and not yet in market could ship with Alexa access. Once you are adding Alexa to one product, it’s much easier to add it to others. This may offer Amazon one more smart speaker or smart display distribution partner in addition to the mobile placement.

Essential Needs More Sales

However, the bigger beneficiary of this deal if it works will be Essential. The company first struggled with launch delays and more recently with lackluster sales. IDC’s Francisco Geronimo tweeted last week that the company only shipped about 88,000 units in 2017.

If Amazon were to put marketing muscle behind the Alexa-enabled Essential model, this number could grow dramatically. Essential is not yet at sufficient scale to justify the high cost of designing, manufacturing and distributing smartphones globally. Amazon could help move the needle and provide much needed sales momentum. This might also salvage Amazon’s investment in Essential.

Voice Assistants and Surfaces

When we talk about voice assistants it is important to consider that they will be used on different surfaces. A surface is generally defined as device type, but some devices can offer multiple surfaces for engagement such as both voice and touch interaction. If we just stick with devices, we can see that Siri was first available on the smartphone surface and Alexa on the Echo smart speaker. Siri has moved onto the Mac, Apple Watch and HomePod surfaces. Alexa has moved onto smart displays, appliances and made tentative inroads into smartphones.

The leading voice assistant manufacturers want them to be available on many surfaces to increase convenience for users and ensure they become a bigger part of consumers’ lives. Mobile is a big gap in Alexa’s distribution model. If Samsung didn’t have its Bixby assistant, you could imagine Amazon courting the global smartphone leader aggressively. With Samsung out of play, Essential is one of the many that Amazon can pick up. Expect more announcements in 2018 about the marriage of Alexa and mobile.

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