Amazon Alexa Market Estimated at $10 Billion by 2020

RBC Capital Markets analyst Mark Mahaney sees a bright future for Inc.’s (NASDAQ:AMZN) Alexa device, projecting it could help generate $10 billion worth of sales by 2020.

Mahaney projects there will be 100 million Alexa devices installed in the next three to five years. $5 billion will come from Alexa sales itself, with a projection that 30% of Amazon customers will be interested in getting a device. The other $5 billion will come from revenues from customers using their Alexa to order other things from Amazon.

Mahaney went on to say “our take is that Amazon has a potential mega-hit on its hands with Alexa – a product/service that has the potential to materially increase the frequency and intensity of Amazon’s relationship with its customers.”

In other words, anything that can make it easier for people to order off Amazon will be a good thing for the retailer’s top and bottom lines.

Critics aren’t quite so bullish, saying Amazon’s Alexa could end up like Apple’s Siri. Many people were excited about Siri’s hands-free capability when it first came out, but most don’t use voice activated commands, preferring to let their fingers do the work. They view Alexa as just another toy in a crowded marketplace.

Remember, there are other competing products out there, including Google Home. In addition, voice commands for smartphones are becoming much better. Some customers might just use their phones instead of Alexa.

Amazon shares were not impacted by this report, falling just 59 cents each, or 0.06%, to $852.41 in early Friday afternoon trading.