Amazon CEO Worldwide Consumer Jeff Wilke Talks Antitrust Actions

CNBC Exclusive: Amazon CEO, Worldwide Consumer, Jeff Wilke & Amazon SVP, Devices and Services, David Limp Speak with CNBC’s Jon Fortt

Jeff Wilke

Image source: CNBC Video Screenshot

The following is the unofficial transcript of excerpts from a CNBC EXCLUSIVE interview with Amazon  Inc. (NASDAQ:AMZN) CEO, Worldwide Consumer, Jeff Wilke and CNBC’s Jon Fortt which aired across CNBC’s business day programming today Wednesday, June 5th. The following are links to video from the interview on CNBC.com:

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Amazon's Jeff Wilke on potential antitrust actions

Amazon's Jeff Wilke on AI and Prime delivery

Also, the following is the unofficial transcript of a live CNBC EXCLUSIVE interview Amazon SVP, Devices and Services, David Limp and CNBC’s Jon Fortt on CNBC’s “Squawk Alley” (M-F 11AM – 12PM) today, Wednesday, June 5th. The following is a link to video of the interview on CNBC.com:

Watch CNBC's exclusive interview with Amazon's SVP of devices David Limp

 

JEFF WILKE ON ANTITRUST AND COMPETITION:

JEFF WILKE: We think that all significant entities in the economy should be scrutinized. So, that’s not unusual. And our job is to construct the business and practices that pass that scrutiny with flying colors. What we’re going to talk about this week at re:Mars is all of the investment that we’re making in customer services and services we offer to developers and A.I. researchers all over the world to build products for customers. And we think that’s a great thing. So, I think you’re going to get a lot of evidence this week that our business model is producing great things for customers and for the world.

JON FORTT: Back to the competition question, because it’s on a lot of people’s minds are there areas-- things that you and the leadership team have determined that you won't do, because you don't think it would be good for competition? Even though it might lead to faster delivery or even though it might seem like the sort of thing that you could do to build the business, you just don't think would be good for the competitive environment.

JEFF WILKE: You know, we're just focused on customers, really. I mean we are trying to invent things that customers are going to love and that we think that's our primary job. And if we do a good job of that, customers will keep coming back to us. But it's too hard to predict what everybody else is going to do. We are going to stay focused on what we can control which is a great customer experience.

JEFF WILKE ON A.I. AND PRIME DELIVERY:

JEFF WILKE: We’re going to see A.I. and machine learning embedded in all kinds of different products. So, it makes personalization better. We just launched an enhancement to the iOS app that lets you screenshot a fashion look that you’re interested in and find something on Amazon that matches. We’ve got improvements to our forecasting service. We’ve got robotics working around in the FCs to make the job safer and make it easier for people to do their work. So, the work changes, but we’ve got lots of people that we’ve hired into our fulfillment centers at the same as we’ve added robots.

JON FORTT: But is there a crazy idea behind it? Because back twenty years ago when you guys were first building out this logistics operation, the idea of doing that was a crazy idea. eBay was doing the smart thing. They didn't have all this infrastructure on the ground. Is there a crazy idea in the era of A.I.?

JEFF WILKE: I think -- what I think is going to happen is the stuff that we're doing for customers, which is all about big selection, really fast delivery speed and low prices, is just going to get better through A.I. So, we have been improving delivery speed for years. We just moved Prime recently from two days to one day and we're going to keep improving the delivery speed across millions and millions of items. We announced this week that it’s 10 million items are available for one-day shipping. We can't do that without a A.I. and M.L.

JON FORTT: And I wonder about that. Because is there a decreasing marginal return on that? I mean, once you're doing one day across the board, is it worth it to invest tens or hundreds of millions of dollars into getting it within a fraction of a day for your core Prime consumer? Do I really need it that much faster? Am I even going to be home?

JEFF WILKE: Well some stuff you might. I mean, if you're out of baby diapers, you might need them fast-- faster than One Day. Okay. So Prime Now is the service that we offer that's really fast. It's less than an hour if you need it that fast and it has a pretty broad selection of items that are available. We also have delivery from our some of our Whole Food stores. We have Amazon Fresh. So there are a bunch of services that are actually faster than One Day and we think we'll have more over time more over time.

DAVID LIMP INTERVIEW:

JON FORTT: Welcome back to "Squawk Alley.” I’m Jon Fortt here in Las Vegas at Amazon’s first re:Mars Conference. Artificial Intelligence a big topic here. A huge ecosystem of devices and services involved. And we’re talking devices and services, it’s great to have Dave Limp, Senior Vice President of Devices and Services for Amazon. So, if you’re talking about the Echo, Alexa, tablets, ring doorbells, you name it, it falls under you. Want to talk about A.I. and the advancements that you’re making. But first, got to talk a little anti-trust. Is all of this scrutiny going on going to change, at all, the way you’re running the Devices and Services business?

DAVID LIMP: No. And we’ve said this to you before, but first of all, welcome to re:Mars.

JON FORTT: Thank you.

DAVID LIMP: But, you know, our focus is: invent on behalf of customers. Right? And if we keep our focus there and build cool things that customers love to use and continue to earn their trust, which we have to do every day, then we think the outputs will speak for themselves. And we focus on that.

JON FORTT: How much has the conversation around privacy and people’s wanting answers into the granularity of that and how A.I. fits, how much of that has that changed your process and the way you think about how you’re rolling these things out?

DAVID LIMP: Well, customer trust is kind of the oil of the Amazon flywheel. And so, we think about it every day. And it -- thinking about privacy as you think about the kinds of products that we’re doing, whether it’s a ring doorbell or it’s an Echo sitting in your kitchen, it has to be foundational to the product. It’s not something you glom on later as an afterthought. And, we think about it at the very upfront. When we’re beginning to invent the product, we think about what would we -- we’re going to put these in our homes: what do we want to think about privacy, what do we think about trust? And we build features into the products and into the services such that that’s first and foremost and paramount. And we’re continuing to evolve that. It’s not like you’re going to get everything right day one. And as we learn from customers, we’ll add new features and services that build on that and add more privacy and trust as we go on.

JON FORTT: It’s easy to get caught up in the magic of A.I. I’m curious about the business. You’ve been talking about conversational A.I. and hiw the advancements will allow people to talk more naturally to Alexa. How does that translate into higher revenue for Amazon?

DAVID LIMP: Well, I think the first thing is to get customers to love a product. Right? If you build a product the customers love and use, then good things usually come in consumer electronics when you do that. So, for us, that’s the first thing that you want to do. It happened early on with Kindle. People loved it and then we figured out how to build a book business around it. And similarly, you know, the great thing about Echo and Alexa, is that customers love the product.

JON FORTT: And what are they buying more of because of that?

DAVID LIMP: You know, I don’t think that they’re necessarily buying more yet because of that. But they are doing certain things in digital that leads to buying some more things. Specifically, we’ve kind of brought music back into the home again. It had atrophied in the home. And now music subscription services, Spotify, certainly Amazon Music and now Apple Music starting last year, they are growing on Echo and Alexa. People are listening to audio books. And so, we have a business there. Audible with a subscription services. So, those are the early signs you start seeing that. In addition, people are buying more smart home products. So you see that a lot around here at re:Mars and the area of automation and a smart plug or a light bulb or a robotic vacuum, people are buying those more because it’s easier to control with a voice interface.

JON FORTT: We’re talking about services and privacy. Apple at the Worldwide Developers Conference a couple of days ago announced Sign In with Apple. You guys have had Log In with Amazon for a long time. Apple’s introducing this idea of privacy with that log in and not handing out people’s email information and addresses. I’m wondering what you think of that and if that’s a direction Amazon might go in?

DAVID LIMP: Well, I think anything that advances the, you know, privacy for customers and gives them a more trusted environment, I’m a big fan of as a consumer. So, I don’t know enough. It just was announced on Monday, so I don’t know enough about that product to sort of weigh in on the specifics of it. But I think as you think about Amazon and our credentials and being able to logon to Amazon, we’ve been doing that for 20 plus years. And your credit card number, your address, which we ship your products too, that’s sacrosanct. We have to really build trust every day. And any anybody – any other company, any other person that’s furthering that, I think is just great for the industry.

JON FORTT: Arguably no company, no brand is more associated with consumer A.I. right now than Amazon is. We’re talking about Apple and how that relationship has progressed. It’s been five years since the Fire phone announcement. That didn’t work out for Amazon. It had a lot of those A.I. capabilities working. I think you’ve said that differentiation was the issue there. It wasn’t differentiated enough. I wonder how that relates to other products that you’re working on? Because I look at Amazon right now and in the tablet category, Apple’s $250 iPad is the number one selling tablet on Amazon. Number two is the $80 Fire tablet. And then three or four, two more $250 iPads. Are you as differentiated as you want to be in tablets?

DAVID LIMP: Yeah, I think our tablet business has done great. It’s very different than Where apple and others focus. We focus on entertainment and focus on a product that’s great for families, with our Kid’s Edition of our tablets. And I think, you know, roughly last Q4, one out of every three tablets sold in the U.S. was an Amazon tablet. So that’s just an amazing business and one we continue to invest in and we’re really excited about.

JON FORTT: I’m trying to figure out how -- what business to compare Alexa to? And it seems like a search business, if say Google were mostly monetizing search by selling its own product. Is that the way to think about Alexa’s role in Amazon’s business, is its getting people’s intent and pointing them towards things even within Amazon they want to purchase?

DAVID LIMP: I think the long-term goal was to try to invent the Star Trek computer. You know, I grew up watching Roddenberry and loved it and so it was a lot more innocent than you might make it out to be. Which is, can we invent that computer? We all loved watching it and the science had moved up enough and you see it a lot here at re:Mars that we thought we had a shot at it. And it’s still going to take us years, if not decades more to get to the shining star that is that Star Trek computer. But we think we can do it. And if you have that in your house or in your car or in your conference room, you’re going to find all sorts of things to do it. Some Amazon will invent and it will help Amazon but much more it will help developers. There’s, you know, 90,000 plus skills, hundreds of thousands of developers building around Alexa right now. And if you had five years ago said, ‘Oh, there’s going to be a new developer ecosystem that’s not about an operating system, that’s not about applications, but about this skills in the cloud,’ you would have laughed at me. But here it is, sitting in front of us, all around us, right here.

JON FORTT: Yeah, literally, all around us here at re:Mars.

DAVID LIMP: All around us.

JON FORTT: Lots of A.I. Thanks for the conversation. Dave Limp, SVP, Devices and Services at Amazon.

DAVID LIMP: Great to be here.

JON FORTT: Guys, back to you.



About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Prior to ValueWalk, Jacob was VP of Business Development at SumZero. Prior to SumZero, Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver