Orange Bets on European Nationalism and Alexa Integration for Djingo Smart Speaker – Here Are the Challenges with That Strategy
Orange announced yesterday that its Djingo smart speaker will be available for purchase in the spring of 2019. The device will be priced at €49 which is similar to an entry-level smart speaker from Amazon and Google in both France and Germany. It will include the Djingo voice assistant and also have access to Amazon Alexa. Djingo was built as a collaboration between Orange and Deutsche Telekom. The voice assistant will also reside in Deutsche Telekom’s forthcoming Magenta smart speaker which does not yet have an announced launch date.
An Appeal to European Nationalism
Djingo and Magenta will enter the French and German markets in 2019 well after Google Home and Amazon Alexa have established user bases. The new devices will also have some unique localization, but far fewer features and third-party voice applications than their American rivals. That means Orange and Deutsche Telekom need to have a strong rationale for consumers to choose the newer, less capable device. According to LighReading, Deutsche Telekom CEO Timotheus Höttges commented:
Today, only 4% of the world’s data is stored in Europe on European companies’ clouds. Meanwhile, the global tech guys have access to all this data, and the more they get the better their services get. We have to do something about that.
Höttges went onto discuss the value of Europe’s data privacy protection rules known as GDPR and Orange CEO Stephane Richard mentioned the strength of European education and startup ecosystems. The angle seems to be that European consumers are all afraid of the growing power of American tech companies, they are justified in that fear, and that the giant telecom companies of France and Germany are going to save them from digital tyranny from abroad. It is an interesting angle for telecom companies to position themselves as defenders of consumer interests and privacy.
Before Facebook and Google, consumer privacy concerns were typically directed at telecom and banks. Whether European nationalism will be an effective selling point remains to be seen. However, the messaging seemed more like an address to a corporate board or political assembly than a consumer product launch. Orange has enlisted support from other American companies in building out its Djingo voice assistant technology. Past reports suggest that Djingo may be using technology from Nuance, SoundHound or both companies. Orange is also an investor in SoundHound.
Djingo Has Alexa Onboard
Despite the concern about sharing consumer data with American tech firms, Orange has decided to offer Alexa voice assistant access through its smart speaker. The announcement states:
“The Djingo smart speaker will also provide access to Alexa, Amazon’s virtual assistant, to offer a wide range of additional services. Orange and Amazon share a vision where multiple AIs complement each other to bring the richest experience to customers. Today, the companies showcase how they are working together to make this vision a reality with the launch of Orange’s Djingo speaker, which comes with both Orange’s Djingo and Amazon Alexa built in. This is just the start, and both companies look forward to expand [sic] multi assistant [sic] integration in their future products.”
Djingo as a product concept was first demonstrated in April 2017. A goal at the time was to build a French voice assistant that beat Alexa to market in the country. Since that time, Google Home, Apple HomePod and Amazon Echo smart speakers have launched in France. It will be two years between when the project was announced and Djingo finally goes on sale.
That delay has offered Apple and Amazon about a one-year head-start on building consumer sales and about 20 months for Google. Amazon and Google have also been cultivating the French developer community to build voice apps that extend the value of their products. Media companies, brands, retailers, smart home device makers, and independent developers have already built services for users on Alexa and Google Assistant. Without Alexa integration, Djingo’s feature set might look too anemic for consumers. So, the Alexa integration is a feature parity gambit to improve the attractiveness of the new product.
The Alexa Fallback Strategy
Having Alexa onboard is also a decent fallback strategy for Orange and future Djingo owners. Orange doesn’t know yet whether it can build a robust ecosystem of partners supporting its platform. However, it knows that Amazon already has this in place and if investment in Djingo at some point is no longer justified, the company still has an offering using Alexa. Similarly, a pitch to consumers is simple. “Buy Djingo because it’s going to be great, have better services tailored to users in France, will protect your privacy, and is controlled by your countrymen. And, even if it fails, you still can use the smart speaker as an Alexa device.”
In a conference room, this seems like a safe strategy to implement. In reality, it removes incentives for third parties to support the platform. They can just support Alexa, which they are already doing, and still reach Djingo users. Djingo users, in turn, get access to these third-party Alexa skills along with native Alexa functionality in a user experience that is more cumbersome than just owning an Amazon Echo. The approach seems like a fast-path to becoming an independent Alexa device maker.
Not the First Telecoms in Europe to Have a Voice Assistant
Spanish telecom provider Telefónica earlier this year released its own voice assistant called Aura. That voice assistant is embedded in devices such as set-top boxes and the Movistar Home smart display and includes integration with Google Assistant and Microsoft. However, Telefónica has a narrower ambition for Aura. It is positioning Aura as optimized for certain functions related to services that the company already provides such as media distribution and communications. Everything else will go to Google Assistant or Microsoft to handle because they already have solutions for those consumer needs.
Orange and Deutsche Telekom justifiably want to control the consumer relationships with the voice assistant and not sit behind a service offered by Google. There is a lot of value to them if they succeed. The challenge is that consumer expectations have already been set around what voice assistants should be able to do and the feature set is very broad. Their competitors in this space are investing billions of dollars annually in their voice assistants with losses subsidized by other very profitable business lines. It is hard to believe two national telecom providers will ever be able to sustain that type of investment and compete. The future of Djingo is more likely to be determined by economics rather than nationalism. The Alexa fallback strategy is most likely the entire strategy, but it will be interesting to see how it plays out. Nationalism is ascendant worldwide and maybe it will work for selling consumer products too.