Hey Alexa, can you tell me why, despite being one of Amazon's most popular and public facing products, you're reportedly on track to lose $10 billion this year?
certainly didn’t help and, despite Alexa getting roughly a billion user interactions per week in 2018, they were mostly simple requests to play music or deliver a weather report. Not exactly the kind of asks that can easily be monetized. That year, it lost almost $5 billion.
Amazon tried other methods of turning a profit including partnering with companies like Domino’s Pizza and Uber to allow customers to order pizza or a ride with a voice command, but it never took off. And even though, users are likely to spend more on other products from Amazon or sign up for Prime, the extra profit from other sectors is no where near enough to cover the ongoing cost of the voice assistant.
According to Business Insider’s report, Worldwide Digital, the division that handles Echo devices, Alexa, and Prime Video streaming, had an operating loss of over $3 billion in the first quarter of this year. The vast majority of that was “tied to Amazon’s Alexa and other devices.” It is apparently on track to lose more than $10 billion this year.
Despite never having reached profitability, it’s hard to call Alexa a straight up failure. Echo devices are among the best selling items on Amazon One employee quoted in the report calls Alexa “a colossal failure of imagination” and “a wasted opportunity,” which feels closer to the mark. Although Amazon tends to keep sales numbers private, it announced in 2019 that it had sold a total of.
Business Insider claims Alexa is the third most popular voice assistant with 71.6 million users, behind Apple’s Siri and Google Assistant . What’s notable about this is that Siri and Google Assistant come pre-installed on smartphones, while Alexa is primarily available on dedicated smart speakers. To get by in modern society, you kind of need a smartphone—but nobody needs a smart speaker.
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