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Facebook Working on Digital Assistant Product 2.0

Late last year, Facebook announced it was entering the smart display hardware market with the release of its Portal devices. Portal, which relied on Alexa as its virtual assistant, was intended to compete with Google and Amazon smart speakers. But ongoing privacy issues led to lukewarm reviews and consumer response.

Now the company is reportedly looking to more directly compete with Siri, Alexa, Cortana and Google Assistant. According to “several people familiar with the matter,” Facebook has been working on a virtual assistant device since early last year. CNBC says, “The effort is coming out of the company’s augmented reality and virtual reality group, a division that works on hardware, including the company’s virtual reality Oculus headsets.”

This isn’t the first time Facebook has created a digital assistant. In 2015, the company released M, an AI assistant for its Messenger app. Unfortunately, last year, after achieving limited success, it was dropped.

Facebook is re-entering the market at a competitive time. Some estimates argue that there are already more than 100 million smart speakers and displays in US homes. Amazon Echo is dominant, holding a 61% share of the market (or potentially more), while Google Home has 24%. Apple and others have smaller shares.

The new Facebook virtual assistant could help explain the recent Portal price drop (to $99), or it could simply be an effort to stimulate consumer demand.

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