Amazon’s strategy to monetize its Alexa-enabled devices has not been successful, leading to significant financial losses for the company. Reports indicate that Amazon lost over $25 billion from its Echo and Kindle devices between 2017 and 2021. Despite having hundreds of millions of customers, the primary use of Echo speakers tends to be for setting alarms and using free apps rather than making purchases directly through Amazon.
A former Amazon executive expressed concerns about the company’s staffing and product efficiency, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” In response to the ongoing challenges, CEO Andy Jassy is reportedly seeking solutions, including a potential paid version of the Alexa voice assistant. However, some engineers within the company are skeptical about the impact of this change.
An Amazon spokesperson defended the company’s approach, emphasizing their focus on creating value for customers beyond just device sales. They asserted that the Devices & Services division has successfully launched several profitable initiatives and is positioned for future growth.
Additionally, Amazon’s new AI-driven version of Alexa has faced delays, with former employees noting a lack of necessary data and access to critical hardware, including chips needed for its advanced language processing capabilities. The company has reportedly shifted its focus on generative AI for its Amazon Web Services division instead of prioritizing the AI-powered Alexa development.
In response, Amazon contends that the claims from former employees are misleading and that the Amazon Artificial General Intelligence team has sufficient resources to pursue its goal of creating the best personal assistant available.