Posted by Jeevan Jayaprakash
Welcome to our first digest for 2017! We hope you had a lovely Christmas and from everyone at Hi Mum! Said Dad, we would like to wish you a very Happy New Year!
In this issue, we look at the learnings from the annual Consumer Electronics Show held in Las Vegas over the past few days, how Alexa is displaying all the characteristics of an operating system and what could be an important step in the digitisation of the NHS.
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Hi Mum! Said Dad
The key takeaway from CES 2017: AIexa-driven IoT
CES is the largest annual technology trade show in the world that attracts some of biggest names in the industry. It is a chance for the big and the small to show off what they have been working and it is also an opportunity to woo retailers and investors.
Over the past 4 days, a common theme seemed to emerged at CES — one that probably won’t come as much of a surprise. There seemed to be a heavy focus on IoT devices from exhibitors and in particular, IoT devices with a voice-driven element with Amazon’s Alexa being a big winner in all of this. Ford announced it is set to integrate Alexa into its cars, LG launched a smart refrigerator with Alexa and Huawei launched its Mate 9 smartphone with, yep you guessed it, Alexa as its assistant of choice. That’s not all either with plenty of other manufacturers showing off washing machines, TVs and soundboxes with Alexa integration.
Some of these products will be met with scepticism and rightly so. How much value will Alexa integration really add to some of these products? Enough value to warrant the premiums that consumers will be expected to pay for some of these products? We are not so sure at this moment in time. However, one of the stylised facts of technology is that prices fall over time and as prices fall, consumer expectations adjust accordingly — what was previously a luxury can quite quickly become “how did I ever live without this?!”.
We may even find that as Alexa gains in popularity, most household products will ship with Alexa as standard, almost forcing consumers’ hands. That last point should certainly not be underestimated — our next piece explores why.
Why Alexa is primed to be the operating system of the home
The piece above is actually quite a nice segue into what we are going to cover here. We came across this extremely smart article from Stratechery which likens Amazon’s Alexa to operating systems (OS) that have come before such as Microsoft’s Windows.
They argue that an OS displays three characteristics:
1. A (good) OS will stimulate cutthroat competition between hardware manufacturers. Over time, this competition will drive down costs for hardware whilst the OS continues to remain just as valuable, if not more so (this increase in value is due to network effects — see next point). Microsoft’s Windows benefitted from this greatly.
2. An OS creates network effects — a virtuous cycle of software development and user penetration. The more software that is developed for an OS, the more useful it becomes to users and in turn, the more likely developers are likely to continue updating and building new software for said OS. This is referred to as ‘lock-in’ of users and developers.
3. An OS interacts directly with the end user and this gives it a lot of power and leverage.
Alexa seems to ticks all three boxes.
Hardware manufacturers are indeed bending over backwards to build devices that utilise Alexa (CES 2017 is a case in point!). Also, building for Alexa via the “skills” framework has always been relatively ease which has encouraged developers and naturally, users have followed. Last but not least, having such a close relationship (quite literally a one-on-one conversation) with the end user gives Amazon a lot of scope for generating a ROI for Alexa by driving users to make orders through Amazon/Amazon Prime. It is the latter that Amazon probably views as the ultimate piece in the jigsaw.
Much like Google can be considered as the operating system of the web, Alexa seems to have manoeuvred itself into pole position for the race to be the operating system of the home and the Internet of Things in general.
AI health startup, Babylon, to work with NHS as part of a trial
Babylon Health is startup that uses AI to provide users with health advice as well as video and text consultations with registered professionals — all directly from a smartphone. They have recently secured a 6 month trial that will allow its services to be offered to around 1.2 million residents in North London.
The primary aim of the trial is to reduce the burden on the NHS by avoiding unnecessary doctor appointments that result from phone calls made to the NHS’s 111 telephone helpline. Although the 111 helpline is manned by trained operators, the hope is that Babylon’s AI triaging will completely eliminate human error and free up NHS resources. Babylon have only been tasked with triaging for now and so unlike the full Babylon product, patients will not be referred for a video consultation with a doctor on the spot (although one would assume that something like this is probably being considered for the future by the NHS).
The NHS are typically quite slow to embrace new technologies and given the size and nature of the organisation, this is to be expected. However, the openness to a trial is indicative of a larger trend in consumer behaviour that the NHS has implicitly acknowledged by partnering with Babylon. People are increasingly becoming more comfortable with the idea of conversing with chat bots (even for sensitive and important areas of their life such as healthcare) if it means they can arrive at the right outcome in an efficient manner. Indeed, Mindshare’s recent ‘Humanity in the Machine’ report seemed to suggest that consumers would trust an AI over humans for certain interactions (however it must be pointed out that 79% of the 1000 individuals questioned agreed that they would need to know a human would be at hand to step in when explicitly asked for).
Originally written as part of Hi Mum! Said Dad’s Weekly Digest.
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