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Alexa Rules, Fitness Trackers Lag, and Other CES Week Revelations

Jan 06, 2017

There are only so many 4K TVs, connected cars, and VR headsets one can look at. CES, the annual gadget show in Las Vegas, is well under way. No breakout hit is apparent, but expected themes have emerged. Artificial intelligence will be more and more crucial. Every industry is in the tech industry now: If digital isn’t transforming your business, just wait. It will. Oh, and nobody seems to want to talk politics in Las Vegas, which is refreshing.

Some quick observations to end the week:

Amazon’s voice-activated speaker, Echo, already was a breakaway hit last year. Now it is becoming apparent that Amazon (amzn) is winning in a second way, as other companies integrate its AI-driven Alexa assistant into their wares. Fortune’s Barb Darrow has a nice overview of the ramifications of Amazon’s progress. One key takeaway is that vendors that incorporate Alexa, like LG in a “smart” refrigerator, use Amazon’s industry-leading web hosting service, a growth engine for the company.

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Gartner says about 30% of people in the U.S., Australia, and the U.K. who’ve worn fitness trackers don’t wear them anymore. That’s a tough business model, sort of like selling diet programs to uncommitted dieters or health-club memberships to January-only athletes. In fact, it’s the ultimate uphill climb, and it explains why Jawbone is receding, Fitbit’s stock is ailing (it's now prioritizing "engagement" with existing users), and the Apple Watch is something less than the Next New Thing.

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Three cheers for diversification: Samsung (ssnlf) says its fourth-quarter profits will grow by nearly 50% from the year-earlier period to nearly $8 billion. The reason: Its chip business never faltered even as its smartphone business cratered. Apple isn’t nearly as diversified as Samsung; a major hit to its iPhone business would be far more calamitous.

Have a great weekend.

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