Amazon’s strategy to monetize its Alexa-enabled devices has reportedly not been successful, resulting in significant financial losses for the company. Internal documents and sources indicate that Amazon lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Despite having hundreds of millions of customers, usage of Alexa-enabled Echo speakers has primarily been for basic functions like setting alarms rather than for shopping.
A former senior Amazon employee expressed concerns about the effectiveness of hiring thousands of staff only to create a smart timer. In response, Amazon CEO Andy Jassy is exploring solutions, including launching a paid version of the voice assistant. However, some engineers involved in the project are skeptical about its potential impact.
An Amazon spokesperson underscored the company’s focus on creating value for customers through its services, rather than solely through device sales. They highlighted that the Devices & Services organization has successfully established several profitable ventures for the company and is set to continue this trajectory.
Additionally, reports suggest that Amazon’s new AI-enhanced version of Alexa, showcased in September, is still in its infancy. Former employees have claimed the company lacks sufficient data and necessary chips to operate the advanced large language model that will power the new assistant. Furthermore, Amazon has shifted its priorities to concentrate on generative AI for its Amazon Web Services division.
In contrast, Amazon has countered claims from former employees, asserting that they have adequate access to essential technology and resources. The company reaffirms its commitment to building an exceptional personal assistant.