Amazon’s efforts to monetize its Alexa-enabled devices have not been successful, reportedly resulting in losses amounting to over $25 billion between 2017 and 2021. This information comes from internal documents and sources familiar with the company’s operations, as reported by the Wall Street Journal. Despite having hundreds of millions of users for its devices, the Echo speakers are primarily utilized for basic tasks like setting alarms rather than facilitating shopping on Amazon.
A former senior employee expressed concerns about the company’s direction, implying that significant resources were spent on developing features that do not enhance revenue. In response to these challenges, CEO Andy Jassy is exploring solutions, including the introduction of a paid tier for Alexa, though some engineers are skeptical about its potential effectiveness.
An Amazon spokesperson highlighted that the company is more focused on the value generated from customer interactions with their services than solely from device sales. They claimed that the Devices & Services division has achieved profitability and is positioned for future success.
Additionally, the development of a new AI-powered version of Alexa is reportedly facing significant hurdles. According to former employees, the project lacks sufficient data and access to the necessary hardware, as Amazon has shifted its focus towards generative AI for its cloud division, Amazon Web Services. In response to these claims, Amazon contends that its former employees are misinformed and stated that the company has adequate resources to pursue its ambitions for Alexa, reaffirming its goal to create the world’s best personal assistant.