November 23, 2022
Amazon’s Alexa voice assistant unit has fallen out of favor in the market and has been dubbed a colossal failure and a squandered opportunity by current and former employees on the company’s hardware team, according to Business Insider.
Alexa has never been able to generate an ongoing revenue stream for Amazon, and it does not make any money. According to internal data obtained by Insider, Amazon’s Worldwide Digital unit, which includes everything from the Echo smart speakers and Alexa voice technology to the Prime Video streaming service, had an operating loss of more than $3 billion in the first quarter of this year, with the majority of the losses attributed to Alexa.
According to the report, while Alexa’s Echo line is among the “best-selling items on Amazon,” “the majority of the devices sold at cost.” According to one internal document, “we want to make money when people use our devices, not when they buy our devices.”
This is due to people failing to meet Amazon’s expectation that customers would buy things on Amazon using their voice. Instead, they ask Alexa about the weather, play music, or set a timer, which leads to the joke that Alexa is on life support.
The sources for this piece include an article in ArsTechnica.
