AI dominated much of 2023 thanks to ChatGPT, but if we look back to previous years, talking of AI usually meant "smart" home assistants like Amazon's Alexa.
Like the Quest, sales of smart home assistants from Amazon and Google spike in December as evident from the downloads of the companion apps needed to activate them.
Alexa has been growing year after year, but this year, things are different...
According to our estimates, the Alexa app has been downloaded 4.6M times from the App Store and Google Play in December. Google Home was behind it with 3.5M downloads.
That's a lot of home assistants! But... it's actually the lowest December since 2018 for Amazon and the lowest since 2019 for Google. And the trend is not looking healthy either.
Alexa is down 27% from last year and Google is down 29%. While Alexa's downloads still had a small spike but Google did not. I haven't seen any real ads for "hey Google" lately which might explain that.
Zooming out, Google has been on the decline since 2020, so this isn't a big surprise. Alexa has been growing pretty consistently since 2020, even though Apple's HomePod (and later Mini) were around.
To me, this decline isn't a result of competition but rather innovation. Lack of innovation in this case.
Home assistants like Alexa used to be "AI" as far as most were concerned. I mean, what's "smarter" than a thing that can recognize what you say and reply? But then ChatGPT came out and showed everyone AI can do quite a bit more.
And if you think about it, Alexa hasn't really evolved much since it came out. Sure, Amazon added a variety of shapes and a clock, but in terms of being helpful, not much has been added beyond some niche functionality.
I think the drop in downloads is a direct representation of that lack of innovation, and also a potential opportunity for competitors. The AI Pin from Humane comes to mind. I have my thoughts on its viability and usefulness, but those aren't relevant in this case because good or bad, it is a competitor. More will come.
I'll leave you with this - 18M people downloaded ChatGPT in December. More than twice the number of downloads for Alexa and Google Home combined.
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