It sounds a bit silly at first blush: Rather than speak to a barista, order a cup of coffee by speaking into a smartphone or to “Alexa,” the digital voice assistant built into the Amazon Echo speaker. Silly perhaps, but it appears that the Starbucks voice-ordering toy is so popular it is hurting the coffee retailer’s sales. Some customers, it seems, are put off by long lines in stores, which the company attributes to too many people ordering from their phones.
Artificial intelligence meets caffeinated beverages. What could possibly go wrong?
In fact, as Fortune’s John Kell describes, it’s the latest example of a company embracing the newest technology to serve customers in a novel way. Starbucks unveiled two whiz-bang, voice-ordering features Monday. One is the “on-command” My Starbucks barista, a non-Siri voice-activated mobile ordering system that works with the Starbucks iPhone app. The other is a “skill” for Amazon’s Alexa. Both allow users to order and pay for coffee without speaking to a human. Customers then pick up their orders at a nearby store.
These bleeding-edge applications ultimately might not work out. It may well be that customers like buying their coffee from that nice young man in the knit cap after all. Successful or not, it proves the increasingly obvious maxim that all companies are technology companies now. It also proves a corollary: If your company serves customers and hasn’t considered a voice-activated app or how it might integrate with Alexa, your company is dangerously behind the times.
The Starbucks app is a good listener. It can handle the order: “Double upside-down macchiato half decaf with room and a splash of cream in a grande cup.” Leaving aside for the moment whether this constitutes progress or something else entirely, something interesting is going on.
And for what it’s worth, it feels really good to write about coffee this morning, not politics.
Have a charged-up day.
Tech CEOs blast Trump’s immigration order, join legal resistance. Several powerful companies came out swinging Monday to protest the executive order barring immigrants from seven Muslim-majority countries. Amazon, Expedia, and Microsoft lent their voices to a lawsuit filed by the state of Washington challenging its constitutionality—others are huddling Tuesday to consider their own response. Google’s protest was the most visible, with thousands rallying against the policy. Two of the company’s most high-profile immigrant employees, CEO Sundar Pichai and co-founder Sergey Brin, addressed their co-workers. (New York Times, Bloomberg, Reuters, Wall Street Journal, Fortune)
BITS AND BYTES
Microsoft pulls off massive bond sale. The software company had no problem finding buyers for its $17 billion offering, the proceeds of which will go toward refinancing the debt it took on to buy LinkedIn. The strong interest was somewhat surprising, given uncertainty over the Trump’s administration’s corporate tax plans. (Bloomberg, Wall Street Journal)
SoftBank may sink $1 billion into office-sharing startup WeWork. The investment would come from the Japanese tech giant’s $100 billion investment fund, reports The Wall Street Journal. The caveat is that SoftBank has considered backing WeWork before but thinks the startup, last valued at $17 billion, is overvalued. (Wall Street Journal, Reuters)
Walmart ditches its Amazon Prime rival in favor of free shipping. The giant retailer is killing a membership program that was meant to compete with the Prime loyalty program. Instead, it plans to invest in free, two-day shipping on orders over $35. (Fortune)
India will roll out free Wi-Fi in more than 1,000 rural villages. The initiative is part of the country’s master plan to reach more than 900 million unconnected citizens. The idea is to provide a powerful new audience for both domestic and international tech firms. (Fortune)
Dropbox reinvents itself, again. The cloud software company on Monday debuted new features meant to distinguish its online document storage service against several fierce competitors—Box, Google, and Microsoft. The startup, which has a reported valuation of $10 billion, has been prioritizing businesses—rather than consumers—over the last few years. Although it is popular, many of Dropbox’s 500 million users use its service for free. (Fortune)
WATCH FOR IT
Why analysts are fretting about Apple’s iPhone 7 sales. The company reports the results of its all-important holiday quarter on Tuesday after the market closes, and Wall Street analysts are getting a bit antsy.
Apple told the analysts three months ago that it expected sales of $76 billion to $78 billion, up from $75.9 billion for the same quarter in 2015. Wall Street is anticipating sales of $77.4 billion and earnings per share of $3.24, versus the $3.28 Apple reported a year earlier.
But many analysts are focused on what Apple says on Tuesday about the year ahead, with anticipation building for a far more exciting iPhone update in 2017 after three years of an almost identical exterior design. And some are worried that the excitement may have gotten ahead of the reality and could possibly depress sales of the iPhone 7 over the next nine months. Fortune‘s Aaron Pressman reports on the possible scenarios.
IN CASE YOU MISSED IT
Google Is on the Prowl for Cloud and AI Deals in 2017, by Erin Griffith
How Fitbit Can Recover From Cratering Sales and 70% Stock Drop, by Aaron Pressman
Apple’s Spaceship HQ Is Nearly Ready for Occupants, by Don Reisinger
Lyft Eats Uber in App Store Downloads for First Time, by Mahita Gajanan
Robots Make Cappuccinos at This New San Francisco Cafe, by Jonathan Vanian
ONE MORE THING
Tesla unveils the world’s largest battery storage plant. The facility in Southern California includes close to 400 battery “stacks” that suck up excess electricity during the day so that it can be used during peak power demand. The installation can power 15,000 homes for up to four hours. (New York Times, Fortune)