Amazon’s efforts to monetize its Alexa-enabled devices have fallen significantly short of expectations, leading to substantial financial losses for the company. Reports indicate that the online retail giant lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021, according to internal documents and sources familiar with the situation.
Despite having hundreds of millions of customers using its devices, the primary functions of the Alexa-enabled Echo speakers seem to revolve around basic tasks like setting alarms and accessing free apps rather than driving sales on Amazon.
A former senior Amazon employee highlighted concerns within the company, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.”
In response to these challenges, Amazon’s CEO Andy Jassy is reportedly seeking a remedy and is set to introduce a paid version of its voice assistant. However, some engineers involved in this new version are skeptical about its potential impact.
An Amazon spokesperson addressed the situation, emphasizing that the company values the overall service provided to customers and not just device sales. They noted that the Devices & Services division has successfully established numerous profitable business ventures and is poised to continue in that direction.
Simultaneously, Amazon’s upcoming AI-powered Alexa, showcased in September, is reportedly far from market-ready. Former employees have claimed the company lacks the necessary data and access to technologies needed for the large language model that will enhance the virtual assistant’s capabilities. Furthermore, there are indications that Amazon has shifted its focus toward developing generative AI for its cloud computing division, Amazon Web Services.
In response to the criticisms, Amazon countered that its former employees’ assessments are misguided and insisted that the Amazon Artificial General Intelligence team has the appropriate resources, including in-house Trainium chips and Nvidia GPUs, to achieve their goal of creating “the world’s best personal assistant.”