Amazon’s attempts to generate revenue from its Alexa-enabled devices have reportedly not been successful, leading to significant financial losses for the company. According to a report from the Wall Street Journal, Amazon lost over $25 billion between 2017 and 2021 on its Echo, Kindle, and other devices, based on internal documents and insights from anonymous sources familiar with the situation. While Amazon boasts hundreds of millions of customers using its devices, most use the Alexa-enabled Echo speakers primarily for setting alarms and accessing free applications, rather than for making purchases.
A former senior Amazon employee expressed concerns about the company’s investment in its devices, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
Amazon CEO Andy Jassy is reportedly seeking solutions, with plans to introduce a paid subscription tier for Alexa. However, some engineers involved in the project are skeptical about its potential impact.
An Amazon spokesperson emphasized the company’s focus on the overall value created through customer engagement with its services, rather than solely on device sales. They claimed that the Devices & Services division has successfully established several profitable ventures and is positioned for future success.
In addition, former employees indicated that the new AI-powered version of Alexa, showcased in September, is far from completion, citing limitations in data and access to the necessary technology. Reports suggest that Amazon is shifting its priorities towards developing generative AI for its cloud computing division, Amazon Web Services, rather than enhancing Alexa.
Amazon countered these claims, stating that former employees lack accurate information regarding its current AI initiatives, asserting that its Artificial General Intelligence team has the required resources to continue improving Alexa, with the goal of creating the best personal assistant available.