Amazon’s efforts to monetize its Alexa-enabled devices have reportedly been unsuccessful, leading to significant financial losses for the company. According to a report from the Wall Street Journal, internal documents reveal that Amazon lost more than $25 billion on its Echo, Kindle, and other devices between 2017 and 2021. Despite boasting hundreds of millions of customers, the primary use of Alexa-enabled Echo speakers seems to be for basic functions like setting alarms rather than for shopping on Amazon.
A former senior employee expressed concern over the company’s decisions, suggesting that considerable resources were spent on developing a smart timer instead of focusing on profitability.
In response to these challenges, Amazon CEO Andy Jassy is reportedly seeking solutions, including the introduction of a paid version of the voice assistant. However, some engineers involved in the project have expressed doubts about its potential impact.
An Amazon spokesperson emphasized the company’s focus on the value provided through its services, suggesting that the Devices & Services division has successfully established profitable ventures and is positioned for future growth.
In addition, the new AI-powered version of Alexa showcased in September is reportedly not ready for rollout, as former employees allege the company lacks sufficient data and necessary technology, such as chips for the large language model driving the updated assistant. Furthermore, Amazon has seemingly shifted its focus away from Alexa to prioritize generative AI for its cloud services unit, Amazon Web Services.
Amazon has countered these claims, asserting that its team working on artificial intelligence has access to relevant technology and resources. The company maintains its commitment to developing what it aims to be the leading personal assistant in the market.