Artificial intelligence (AI)-powered voice assistants are gaining traction among consumers.

Once confined to smart speakers and smartphones, assistants like Amazon's Alexa and Google's Assistant are increasingly sprouting up in more diverse settings. One such setting is inside of cars, and last week at the Consumer Electronics Show (CES), it became clear that the car is the next major arena for voice assistants.

Voice assistant providers have employed three different tactics to get into cars:

  • Partnering with third-party hardware manufacturers to build aftermarket devices. Last week, Google announced a pair of initiatives on this front. First, it partnered with Anker, which makes chargers for electronics, to develop the Roav Bolt, a device that costs $50 and plugs into the 12-volt power port of a car and enables passengers to access all of Google Assistant's features. The search titan's assistant is in a similar product called the "Link Drive" offered by JBL, though the device is slightly more expensive at $60. Both of these products are geared towards cars that don't have embedded connectivity.
  • Manufacturing their own devices.Amazon is the only voice assistant provider that has made its own car-focused device known as the Echo Auto and it's been a hit so far. The e-tailer revealed last week that over 1 million people have pre-ordered the Echo Auto. The Echo Auto's popularity could encourage other voice assistant providers like Google or Apple to follow its lead and develop competing devices for their assistants.
  • Partnering with third-parties to embed voice assistants into cars' infotainment centers.Amazon, for instance, agreed to work with HERE Technologies to build Alexa functionality directly into HERE's in-car navigation platform. HERE's platform underpins the in-car navigation systems in many automakers' cars, including BMW and Audi. Similarly, Amazon also partnered with Telenav to install Alexa in the company's navigation systems. Amazon has also worked directly with automakers in the past to embed Alexa into vehicles' infotainment centers, showing it's willing to pursue multiple avenues to get its flagship assistant inside cars themselves.

For voice assistant providers and automakers, the car offers an opportunity for unique, localized services they can generate recurring revenue from.For instance, automakers and voice assistant providers could offer local merchants ad time whereby their services are promoted to drivers via Alexa or Google Assistant when a car drives nearby. Passengers could then make purchases directly via voice, which automakers and voice assistant providers could earn a revenue cut off of.

Simultaneously, these services also bolster the in-car experience for consumers, which could be a key differentiating factor for automakers once connected cars are ubiquitous.

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