Editor’s note: Voice-controlled digital assistants are set to usher in a new computing era, says Technology Business Research Analyst Jack Narcotta. And Lenovo is among the early adopters through its deal with Amazon to utilize Alexa.

HAMPTON, N.H. – Amid a sea of smart gadgets and virtual reality gizmos unveiled at the 2017 International Consumer Electronics Show (CES), the loudest voice among the cacophony of more than 3,800 exhibiting companies originated from a relative lightweight in the devices market: Amazon. Alexa, Amazon’s voice-controlled intelligent personal assistant, stole the show at CES 2017.

With Alexa TBR believes Amazon has potentially ushered in a new era of voice-controlled computing. Alexa — and peers such as Google Now, Google Assistant, Microsoft’s Cortana and Apple’s Siri — is poised to disrupt PC and mobile device industries significantly. Devices such as Amazon’s Echo and Echo Dot provide a new way to access information and content thhat is faster and simpler than typing on a PC or mobile device, or “conversation computing,” according to TBR.

Over the last two years, PC and mobile device vendors have explored ways to create a more immersive user experience, whether through augmented, mixed or virtual reality, or extremely high-resolution touch-screen displays. The stakes are high, with more than $50 billion of new revenue in play as well as opportunities to offset lost revenue as smartphone and tablet revenue growth slows. With voice technology such as Alexa primed to proliferate exponentially, TBR believes users’ computing experiences are poised to make tremendous steps forward.

Voice technology fulfills the promise and potential of the convergence of PCs, mobile devices and other connected devices more than any PC- or mobile device-centric solution to date. Alexa could be on par with Windows, Android and iOS, equally as disruptive to the devices market as when those operating systems were introduced.

With their lower price points and ubiquitous access to the internet, Alexa-powered devices risk undermining the strategies PC and mobile vendors seek to employ to ensure their devices remain most users’ hub to access information, stream entertainment and perform simple productivity tasks such as calendar management and reminders. Vendors that fail to adapt to the disruption ushered in by Alexa, whether by partnering with Amazon directly or integrating pieces of Alexa technology into PCs, mobile devices, wireless internet routers, displays and other connected devices, risk conceding revenue and damaging their brands.

The lack of interoperability between these current platforms and emerging connected devices is a gating factor for PC and mobile device companies to expand their brands and businesses beyond the reach of well-served mainstream device markets. TBR believes Alexa will provide a template to removing this obstacle, becoming a broker or concierge-like service for users of devices that do not utilize the same operating systems. Apple’s and Google’s attempts to corral smart home opportunities have largely fizzled due to the proprietary ecosystems of their devices and services. By deploying Alexa at a layer above the device operating system, Amazon is able to move more quickly and decisively through the market, capturing first-mover benefits such as developer mindshare and customer market share.

Alexa’s impact on PCs, mobile devices and the $100-plus billion connected device market

For PC and mobile device manufacturers, Amazon is a competitor as well as a potential partner, competing for and aiding partners’ efforts to claim a share of the tens of billions of dollars in new revenue opportunities that connected devices such as Echo and Echo Dot will inject into the devices market. As a competitor, Amazon stands to benefit from powering a significant portion of the devices (e.g., wearables, smart home devices, smart car technology, smart clothing, smart media and entertainment hubs and consoles, etc.) that will account for what TBR believes will be a $104 billion connected device market by 2021.

Amazon’s partner model for Alexa — vendors can either utilize full Alexa technology and integrate that into their hardware, or work with only the pieces they need from the Alexa software kit — makes it simpler and faster for Alexa-savvy manufacturers to bring products to market, helping the connected device market swell to significant size in a short amount of time. At CES 2017 Amazon noted the Alexa ecosystem had surpassed 7,000 skills, or applications utilizing Alexa, up from 1,000 just seven months ago. TBR expects this tremendous application growth to continue, especially amid the popularity of Amazon’s Echo and Echo Dot devices, both of which were sold out on Amazon.com during the 2016 holiday shopping season.

In contrast, global PC and mobile device revenues are expected to be flat through 2021, at best. Revenues for PC companies such as Dell Technologies and HP Inc. are rebounding as premium PCs entice users to upgrade older PCs, but elongated PC life cycles will pose a challenge for these companies over the next five years. While Apple, Dell Technologies, HP Inc., Huawei, Lenovo and Samsung generate the bulk of devices market revenue, few of these vendors have articulated — even fewer enacting — strategies that address the market opportunities outside their traditional PC or mobile device businesses. Vendors’ speeds entering the conversation computing market vary.

Lenovo was among the first PC vendors to market with its Smart Assistant. TBR believes other vendors will follow. Only a handful of mobile device vendors, notably Samsung and Huawei, have articulated plans to produce digital assistant hardware, and they remain mum on detailed plans to commit to in-house, Google or Amazon (or other third-party) voice platforms. Google Home and burgeoning Google Assistant (i.e., Google’s more robust version of the Google Now voice-controlled search service) are competing with Amazon but were late to market relative to Echo and Echo Dot. The key aspects of vendors’ success will be product and go-to-market integration: Vendors’ new digital assistants must be compatible with their mainstream PC or mobile device product lines.

Lenovo’s release of its Alexa-powered Smart Assistant, somewhat curiously marketed as an Amazon Echo competitor, shows Lenovo is the first among the traditional PC companies to break from traditional device business thinking and commit to exploring opportunities with alternative operating systems. An argument could be made that most PC companies have explored this via Google Chrome or Android, but TBR believes Alexa is different in that it will be integrated into myriad new connected device form factors and use cases much different than enabled by traditional PCs or smartphones.