Alexa is costly

Echo Dot. © Amazon.

The Alexa voice assistant, which turns ten this year, pioneered a technology that Google and Apple have emulated. It’s never really earned Amazon much income though. The Alexa division is part of the “Worldwide Digital” group, along with Amazon Prime Video. According to Business Insider, this group has lost 3 billion USD in Q1 2022 alone. The “vast majority” of losses has been attributed to Alexa. Business Insider talked to a “dozen current and former employees”, who described a “division in crisis”. Nearly all plans to monetize Alexa have failed, with a former employee describing Alexa as a “colossal failure of imagination” and a “wasted opportunity”.

Alexa, seemingly former CEO Jeff Bezos’s pet project, was given a long runway within the company. Newly-appointed CEO Andy Jassy doesn’t share in the enthusiasm and announced a major downsizing of the division. But he’s not giving up on Alexa entirely, he told Amazon employees. It’s also come to light that though the Echo line of Alexa products are some of the better sellers on Amazon, most devices have been sold at cost, generating no profit. Business Insider ranks Alexa third in the US market, with Google’s Assistant logging 81.5 million users, Apple’s Siri tallying 77.6 million, and Alexa, 71.6 million.

⇨ Ars Technica, Ron Amadeo, “Amazon Alexa is a ‘colossal failure,’ on pace to lose $10 billion this year.”

2022-11-21