Amazon’s efforts to monetize its Alexa-enabled devices have fallen short, leading to significant financial losses for the company. According to reports, Amazon incurred over $25 billion in losses from its Echo, Kindle, and other related devices between 2017 and 2021. Internal documents and sources indicate that, despite having hundreds of millions of customers, the primary functions of Alexa-enabled Echo speakers revolve around basic tasks like setting alarms rather than facilitating purchases on Amazon.
A former senior Amazon employee remarked on the situation, expressing concerns over the company’s expansion despite the lack of effective product utility. In response to these challenges, Amazon CEO Andy Jassy is reportedly exploring solutions, including the introduction of a paid subscription model for Alexa. However, some engineers allegedly doubt the potential impact of this change.
An Amazon spokesperson emphasized the company’s focus on creating value through its services beyond device sales, claiming that its Devices & Services sector has successfully established numerous profitable ventures.
In addition, Amazon’s new AI-powered version of Alexa, revealed in September, is reportedly not ready for deployment. Former employees have expressed concerns over the company’s lack of sufficient data and access to necessary technology to support the advanced large language model for the assistant. It seems that Amazon is prioritizing the development of generative AI for its cloud services, Amazon Web Services, over the new Alexa capabilities.
In response to criticisms from former staff, Amazon stated that they are misinformed about the company’s current AI initiatives, claiming access to the necessary hardware for developing their new AI platform. The company’s commitment remains to create an advanced personal assistant.