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Virtual Assistants, Voice Technology: Winners And Losers

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Virtual Assistants, Voice Technology: Winners And Losers
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Following an expert call with Brian Roemmele, an expert and visionary in voice-internet and digital payments, Baird picked the potential winners and losers among companies operating in the voice technology space.

The Winners

Presenting Roemmele's view, analyst Colin Sebastian said Amazon.com, Inc. (NASDAQ: AMZN) and Apple Inc. (NASDAQ: AAPL) may be in the best position to benefit long term from the voice-first transition, with the former in pole position. The expert feels Amazon could leverage Echo devices to accelerate the pace of Prime growth/order velocity even further.

Also In The Reckoning

The firm believes Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), International Business Machines Corp. (NYSE: IBM), Microsoft Corporation (NASDAQ: MSFT) and SAMSUNG ELECTRONIC KRW5000 (OTC: SSNLF) could be winners if these companies adopt voice-first orientations more rapidly.

Payment companies such as Paypal Holdings Inc (NASDAQ: PYPL), chip and hardware companies leveraged to voice devices ad transactions also stand to benefit, Baird said. On the contrary, the firm said losers will be those companies that do not adapt quickly to voice, including some of the vertical apps that depend on touch-screens.

Baird noted that the call shed details on the opportunities and challenges posed by emerging voice technologies, including Amazon's Echo/Alexa, Apple's Siri and Google's Home/Assistant and upcoming Samsung/Viv rollout.

AI/Machine Learning To Power Intelligent Assistants

Roemmele was quoted as saying the availability of voice services today are rudimentary and do not demonstrate the opportunities for more contextual interactions. The expert believes intelligent assistants of the future will benefit from AI/machine learning that combine mountains of data with user history to offer personalized two-sided conversations.

Text/Touch Business Models On The Backfoot

However, the expert call also brought up meaningful threats in a post-app world to existing e-commerce and advertising business models that rely on text/touch mechanisms of interaction such as Google PPC/search ads, local reviews.

Baird differed slightly with the expert view that e-commerce/transactions will likely replace search ads as the most lucrative form of platform monetization. Instead, the firm sees opportunity for more creative ad formats with voice interaction. The firm believes there may be even larger opportunities for companies that can provide the "abstraction layer" that connects users with the information/products/transactions delivered via intelligent assistants.

Ratings

  • Amazon — Outperform.
  • Apple — Outperform.
  • Alphabet — Outperform.
  • Paypal — Outperform.
  • Alibaba Group Holding Ltd (NYSE: BABA) — Outperform.
  • Facebook Inc (NASDAQ: FB) — Outperform.
  • Twitter Inc (NYSE: TWTR) — Neutral.
  • Yelp Inc (NYSE: YELP) — Neutral.

Related Links:

Apple Vs. Amazon Vs. Google: Digital Assistants Square Off At CES

From CES To The Auto Show: Digital Assistants Making News In 2017, But How Can Siri And Alexa Be Improved Upon?

Image Credit: By brewbooks from near Seattle, USA - Amazon Echo unpacked, CC BY-SA 2.0, via Wikimedia Commons

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DateFirmActionFromTo
Mar 2017NeedhamDowngradesStrong BuyBuy
Mar 2017NomuraMaintainsBuy
Mar 2017BernsteinMaintainsOutperformOutperform

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