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The way that I look at this is that this is the first generation of Amazon hardware that has your fingers on it right and as a place to start, can we talk a bit about the hardware innovation, the areas that you feel are most important here in this generation.
Yeah, I think this is a first. It's an incredible team that's building these products, and these products are designed from the silicon up. Quite literally, this is custom silicon built for the Alexa products. But there's also a focus right now on the sensing capabilities from the camera to the microphone to just presence detection through Wi Fi. It's really important because you can start enabling these productive scenarios.
The other thing is great sound like ED is so important for our customers, like just filling your house with sound. I think sometimes we forget the emotion of music or how clear you want to have that conversation back and forth. So each one of these details is kind of thought through. These products are built from the ground up, but this team has just literally pushed through every detail.
I think about this at a time where we are in a voice assistant or voice based generative AI era right. As you know. I have an Alexa device in almost every single room of my house. But when I think about the Genai, which is I'm always by the way right it is. But here's the thing, the Genai tools that I'm using every single day, I go to my smartphone because it's on my person. There isn't something that the Alexa device can do with the same immediacy. Maybe
you disagree that my funbs can do. So what is it about this generation of hardware that makes those form factors, the echo devices and the range of other things the right form factor for this era.
It's a good question. It's a good question. First, the the new Alexa Alexa Plus is powered by AI, so it's LLM backed, if you will, so limitless knowledge, limitless understanding, and you can have any conversation. It's quite conversational. So when you talk about what you're typing into a phone, one of the things I like talking about is maybe even a little easier now ed because you have all
that kind of infra, you literally can just speak. I call it amby as a team call it ambient AI, and we believe that your Eco device is right now as you light them up with Alexa plus, just have any conversation at any time. I think you're something quite powerful about that too. Where a lot of times we take out our phone, we get distracted. I'm at the dinner table with my kids. We have this idea that we want to keep our phones down right because we want
to be present with each other. And there's so many times where you pull out your phone to answer a question. Almost like you just said, but now it's just changed, it's completely different. Just say, Alexa have the conversation. It's quite literally all the information there and it's conversational. Not only that, she can then get the next thing done for you. Let's say you have a conversation, you want to talk a little bit more about what's happening and
what do we think about what's happening tomorrow. You just add it to your calendar right there, and then just with your voice, it's distraction free, it's ambient, and it's so fun because you're just engaged in a totally different way with your voice.
Just as you said, Alexa plus is listening more contextually, it is listening more intelligently. Yeah, how do you build trust with the customer consumer base knowing its capabilities.
We've been doing it for ten plus years. This is what we are one hundred percent focused on for our customers the end of the day. The way you do that is you give your customers full control, full control, opt in, opt out, remember what you want do just literally control your data for yourself. Plus, everything to Amazon is anonymised, so we don't really have any info. So at the end of the day, it's up to you and what you do with your product. And I think
that's what the answer is. That's you give customer full control, and we do. We're very proud of that, Like, that's a big deal for us.
Is there like a generational divide in the Alexa user base and how does this generation of hardware change that? In other words, is there just a group of people in society that are going to come to AI enabled devices for the first time here? And if so, for what reason?
We do think so? We do think so a couple of reasons. One, you know these are objects and you know they're beautiful. This matter is like when you buy something and something you covet, something you wanted, and you go after because it's so useful and it can get so much done for you. And it has that depth of knowledge. We do think there's a whole new customer base coming in for Alexa to go use Alexa Plus.
That's why these products were designed and maybe to your first question, like thought all the way through, including how it fits in your home or how it fits in your apartment where it just seamlessly fits in, and then with the beautiful sound that comes off of it, that elegance of just contextual understanding. Combine those things and you end up with a whole new category of device for people, which then leads you to a whole new customers set. I'm pretty pumped about it.
Panas s Bloomberg's Mark Gumman has written, and it's based in part on a conversation with you, that Amazon's overhauling its device is to take on Apple in this AI era. Do you agree with that?
I haven't seen it. Can I say that? Let me read that article that Well, here's what I'd say. We build our products for our customers and for people. My whole goal is quite simple. We want AI to be useful for people, end of story. And I think we're building devices to do just that. And I do believe they're beautiful. I think they fit in the home. I think they're so well thought through that when people use these devices said they're gonna love them, They're just gonna
love them. I can't like this is something I just want people to get their hands on them.
The way that we could look at this bigger picture is that the Echo family at least has always had an element of affordability. And I know that you also want to look broader at premium products too, So how do you balance the signature premium while keeping that sort of historic affordability of what Echo is represented to date.
You essentially build products for every customer. That's how you do it. Like we have products that started forty nine dollars and can go up to four ninety nine, and you know, you can think about price point, but then you also think about feature set. We want everybody to have that great experience, but they can do it at the price point that that suits them best, and you know they're at that point when you're able to kind of encompass, then you know you have something for everybody.
That's that's really a big deal for us, and we'll continue to build not only affordable products, but also beautiful products. We in essence we wrap that in a package that we just say, we just need to make great products for people.
Panas how many people are paying actively for Alexa plus and how many of them are using it just through their Prime Prime platform subscription or entitlement.
We're not quite there yet. Ed, we're still in early access. So in early access, nobody right now is actually paying. They're just using it. We're getting the feedback, we're seeing incredible engagement. You know. We we have over ten million people have access to it right now. It's pretty awesome though to see how they're using it. But right now, because it's an early access, So I go back to we're not charging.
I go back to the root of my question, which is on the hardware innovation. Right the choice that a consumer will have is is the need to pay twenty dollars a month for Alexa Plus. They might have older generations of now obsolete Amazon hardware. Is upgrading to this new generation absolutely necessary to access all that Alexa plus has to offer?
Absolutely not. You can, like, we design the product to work back to products all the way back to twenty sixteen, and so that is like a ninety nine or so percent of our customer base right now ed this was really important point. If we're going to have AMBIENTAI where people can just talk to Alexa plus anywhere. It wasn't about just replacing products. That said, the new hardware is awesome, and we really do want people to experience the next
generation of it. These products are faster, they fit seamlessly into your home. The sound is amazing, the microphone is amazing, the sensing is amazing, and so to really get the best experience, for sure, the new hardware leads you there. And that's what today was all about. But I also want to tell you, like, this is all about customers and doing everything we can for them, and part of that is making sure that they have access to Alexa Plus in their homes right now if they choose to.
If it's about the customers. Now that you've had some time in this role, and I know you think so deeply about everything from supply chain through to the product itself, the in housework on silicon, we've been over that. But is there a pressure to make this device's businesses a division profitable or is it not necessary if there is some bigger picture goal here, Yeah, no.
It's it is about it is well first there's you know, there's a lot of different device businesses, so you know, but also it is about making you know, creating the next big business for Amazon, and you know, we see that growth and we're pretty excited about it.
Panos, there was actually a really large range of things, right, I think you're you're alluding to Ring as being one of the the the offerings today right across the broad range of of hardware domains in product line. You know, if there is one single device that is most important that you've gone through today, which is it? Please?
You can't please? Yeah? Well, and it's like asking me what it's like asking you what my favorite who my favorite child is that I have for of them? I made that mistake once quite literally, and I have to tell you, like, I mean, these products are all pretty amazing. I think the Ring product family is stunning right now. In four K. Kindle is a product that I'm in love with every day and use every day alongside Ring, and then the Eco devices are also lighting things up.
Fire TV is used by hundreds of millions of people. So picking is a little bit tricky for me. It's like picking my favorite is something I don't I definitely don't want the team to team to say, so I'm going to say like I think, I think, I'm going to treat that and hold them all up equally as most as important as Really it does come down to how they all connect together. So that's real. It does.
As you've explained, Panos, it is a broad offering with lots of different subcategories, and I appreciate you taking the time and going so deep on it with me, Panels Pana the device is chief Amazon really grateful for your time.