Here's why Amazon and Google are fighting to be 1st in your home
Companies are making the push to get customers invested in their tech ecosystems and even help train their AI
From Black Friday sales to Boxing Day blowouts, Amazon and Google are offering their smart speakers at a deep discount — even giving them away, in Google's case.
But don't be fooled by the corporate giants appearing to get into the holiday spirit. They're looking to get you invested in their tech ecosystem and even help train their artificial intelligence.
"They're all trying to shape your behaviour by giving you these speakers for virtually nothing," said Marvin Ryder of McMaster's DeGroote school of Business. He says it reminds him of when Apple debuted its iPods in the early 2000s.
"I used to argue they should give it away because they'd sell it for $199 but it holds 5,000 songs. If I send you to the iTunes store you'll spend $5,000 loading it, so why don't [they] give it to you for free?"
He says the same goes for the Google Nest and Amazon Echo and Alexa devices. To get the full experience, you need more than one.
"Once you've got one in your home, your temptation is to go deeper and deeper and deeper," said Ryder. "I can make more money from you down the road — whoever gets there first is going to mine you the most."
Amazon dominates smart speaker market
Right now, said Ryder, Amazon dominates, with almost 70 per cent of the market. Google has 25 per cent, with Apple and others fighting for the final five per cent.
"So if I can get into the home — however I can get that first thing into the home, it's probably worth it because I can make my money down the road" said Ryder, through app purchases and add-ons like smart thermostats and video doorbells.
They also tap into millions of artificial intelligence trainers, who all contribute in their own way to machine learning and making a better, more reliable product says Graham Taylor, an AI expert who has worked on Google's Brain Team. He's now the Canada Research Chair in Machine Learning.
"This data is pretty valuable," said Taylor. "The obvious value is in marketing you goods, controlling the retail channel and being able to send you ads for things it thinks you need. But the other less obvious one is around improving the system for all users."
An 'essential ingredient'
It comes back to a basic principle of machine learning: you're interacting with examples provided by a system, and teaching it to learn from those examples.
"You're supplying an essential ingredient for the training," said Taylor. "It's not just the raw data, it's the labelling and putting that data in context — something we still really rely on people to do."
For its part, Google says its goal with the Google Nest Mini giveaway was "to reward YouTube Music subscribers. Nest Mini is a small smart speaker with big sound, making it a fun way for [YouTube Music] subscribers to listen to their favourite songs, hands free."
A spokesperson didn't directly respond when asked to what extent user content is used to advance its machine learning, but did say its devices would only send audio to Google when keywords like "Hey Google" are used, and you can delete any of those recordings through the Nest app.
It also said the microphone can be turned off using a physical button on the device and pointed to its Google Nest privacy principles for more details.