Alexa is a "colossal failure" for Amazon, on pace to lose $10 billion this year (Ars Technica)

[Commissar SFLUFAN]

Amazon Alexa is a “colossal failure,” on pace to lose $10 billion this year

ARSTECHNICA.COM

---

Layoffs reportedly hit the Alexa team hard as the company's biggest money loser.

 

Quote

 

Amazon is going through the biggest layoffs in the company's history right now, with a plan to eliminate some 10,000 jobs. One of the areas hit hardest is the Amazon Alexa voice assistant unit, which is apparently falling out of favor at the e-commerce giant. That's according to a report from Business Insider, which details "the swift downfall of the voice assistant and Amazon's larger hardware division."

 

Alexa has been around for 10 years and has been a trailblazing voice assistant that was copied quite a bit by Google and Apple. Alexa never managed to create an ongoing revenue stream, though, so Alexa doesn't really make any money. The Alexa division is part of the "Worldwide Digital" group along with Amazon Prime video, and Business Insider says that division lost $3 billion in just the first quarter of 2022, with "the vast majority" of the losses blamed on Alexa. That is apparently double the losses of any other division, and the report says the hardware team is on pace to lose $10 billion this year. It sounds like Amazon is tired of burning through all that cash.

 

 

Quote

The BI report spoke with "a dozen current and former employees on the company's hardware team," who described "a division in crisis." Just about every plan to monetize Alexa has failed, with one former employee calling Alexa "a colossal failure of imagination," and "a wasted opportunity." This month's layoffs are the end result of years of trying to turn things around. Alexa was given a huge runway at the company, back when it was reportedly the "pet project" of former CEO Jeff Bezos. An all-hands crisis meeting took place in 2019 to try to turn the monetization problem around, but that was fruitless. By late 2019, Alexa saw a hiring freeze, and Bezos started to lose interest in the project around 2020. Of course, Amazon now has an entirely new CEO, Andy Jassy, who apparently isn't as interested in protecting Alexa.

 

Quote

 

That plan never really materialized, though. It's not like Alexa plays ad breaks after you use it, so the hope was that people would buy things on Amazon via their voice. Not many people want to trust an AI with spending their money or buying an item without seeing a picture or reading reviews. The report says that by year four of the Alexa experiment, "Alexa was getting a billion interactions a week, but most of those conversations were trivial commands to play music or ask about the weather." Those questions aren't monetizable.

 

Amazon also tried to partner with companies for Alexa skills, so a voice command could buy a Domino's pizza or call an Uber, and Amazon could get a kickback. The report says: "By 2020, the team stopped posting sales targets because of the lack of use." The team also tried to paint Alexa as a halo product with users who are more likely to spend at Amazon, even if they aren't shopping by voice, but studies of that theory found that the "financial contribution" of those users "often fell short of expectations."

 

 

[Uaarkson]

All this technology is bullshit because at the end of the day, touchscreens are just quicker and easier. Same reason VR will never replace mouse and keyboard. Some things aren’t broken and don’t need fixing.

[mclumber1]

1 minute ago, Uaarkson said:

All this technology is bullshit because at the end of the day, touchscreens are just quicker and easier. Same reason VR will never replace mouse and keyboard.

 

I have Google Nest speakers throughout my house, and they are quite handy.  It's nice being able to listen to music in the shower by telling the Speaker you'd like to listen to something specific.

[Joe]

Alexa is amazing. Sucks that it doesn’t make money tho.

[ThreePi]

I use an Echo Plus (and a bunch of other Echo devices) to control a lot of stuff in my house. Lights, thermostat, garage door, front door lock, etc. I would hope that doesn't go away, but I certainly don't understand how you would monetize it without just a straight subscription service to set up routines and stuff. 

[Jason]

What if we put Alexa in the Metaverse and make her a sexy anime waifu? This is how billionaires think, right? 

[Ricofoley]

I don't know why Amazon seems to be fixated on getting people to buy stuff outside of just going to the website. Those little key fobs where you could smash a button and buy more Tide or whatever were weird, and thinking that people were going to use Alexa to buy stuff and not turn lights on is equally weird.

[GeneticBlueprint]

15 minutes ago, Joe said:

Alexa is amazing. Sucks that it doesn’t make money tho.

Word. I love using Alexa and have one in all the main rooms of my house. There are some features that are lacking though. 

[Ricofoley]

5 minutes ago, Jason said:

What if we put Alexa in the Metaverse and make her a sexy anime waifu? This is how billionaires think, right? 

 

[Brian]

35 minutes ago, mclumber1 said:

 

I have Google Nest speakers throughout my house, and they are quite handy.  It's nice being able to listen to music in the shower by telling the Speaker you'd like to listen to something specific.

We use it with my daughter all the time. Music for bath/dance. Set timers for activities.  Weather. Animal noises. Turning on lights. Sound machine.  I know you can do that all with a smartphone but when you have a 3 year old who wants your phone whenever she see it, it becomes a really useful device especially since it is out of reach. 
 

Google was one of her first words actually. 

[LazyPiranha]

Alexa is a fun little distraction that doesn’t replace the average utility of anything most of the time.  The most use I got out of it was having hard to reach smart plugs I could turn on and off and even then it was easier to flick them off on my phone.  For a while we used it to making shopping lists but the hassle of opening the app to read the list only to have to renavigate back to where it keeps the list every time you opened a different app or locked the phone screen made it just annoying enough to replace it with a notepad on a magnet.  
 

Which is a shame because it largely works. It almost never mishears me, it can understand my kids to a shocking degree, and is genuinely kind of useful for a specific limited range of things.  It’s just that the limited range of things it’s good at doesn’t justify billions of dollars.  

[Ghost_MH]

5 minutes ago, Brian said:

We use it with my daughter all the time. Music for bath/dance. Set timers for activities.  Weather. Animal noises. Turning on lights. Sound machine.  I know you can do that all with a smartphone but when you have a 3 year old who wants your phone whenever she see it, it becomes a really useful device especially since it is out of reach. 
 

Google was one of her first words actually. 

 

I've mentioned better that my 5yo is autistic. She doesn't really understand how language works even if she's perfectly capable of properly pronouncing words and is able to label things correctly and sing songs. Any words used correctly are just mimicry right now. Hopefully she'll understand then after more school and a ton of therapy.

 

Google Assistant is amazingly helpful when you have a kid that doesn't understand why you shouldn't turn in the light at 3am and start playing with your toys. No light switches in the room. She a smart light that takes voice commands. However, my daughter has picked up Assistant commands. Now after I tuck her in she says "Good night. I love you. Hey Google, turn off the girls' light".

 

Don't even get me started how nice it is to be able to bark at the TV while carrying around babies and have the TV just do what you want.

[Commissar SFLUFAN]

Because I'm actually a technophobe at heart, I have never and will never use any of these types of devices

[Kal-El814]

Being able to tell Siri to turn my lights on and off and to play music in specific rooms are things I’d never thought I’d use but I have really come to enjoy. I use it while driving and for reminders as well, it really works well for those things. 
 

But it’s hard to imagine the juice being worth the squeeze for a company like Amazon. 

[Jwheel86]

Alexa and Google Assistant have no shit saved lives in the disabled community. Personally it has massively cut down on my "can't get help/no one can hear me" anxiety. It's a big component of my future independent living plans with custom emergency commands such as flashing lights and sounds in my roommates bedrooms. 

 

The Echo Dot is a pretty common item in Big Pharma paid for disability care packages. 

[SuperSpreader]

I only use voice control on Android Auto and it gets everything wrong 

[Jwheel86]

Just now, SuperSpreader said:

I only use voice control on Android Auto and it gets everything wrong 

 

Did you train it? It's shockingly good with my weird voice. 

[SuperSpreader]

1 minute ago, Jwheel86 said:

 

Did you train it? It's shockingly good with my weird voice. 

 

I speak in Spanish and English and it can't comprehend me pronouncing Spanish words and names correctly. 

 

[ort]

These things drive me nuts. I also choose not to have one in my house.

 

My kids want one, and I just have zero desire.

 

It's not a surprise that they don't make money. I'm sure the hardware is basically sold as cost or barely above cost. I always saw it as more of a long game for our eventual Star Trek like future where voice is the main input... but the truth is we won't really need boxes to get there and I don't think any one company can really rule that space, if that even is where we go.

 

One thing I notice is that my kids hate typing shit. They will ask Siri to do everything. They will ask Siri 5 times in a row before they even think to try and do a regular web search or whatever.

[marioandsonic]

I don't use voice-activated shit for anything...so I'm basically a peasant in comparison to all of you lol

[skillzdadirecta]

1 hour ago, Commissar SFLUFAN said:

Because I'm actually a technophobe at heart, I have never and will never use any of these types of devices

Me neither bro  I was actually surprised when I went to my Dad's house last month and he had one. I was geniunely shocked. So Alexa is basically Amazon's Kinect eh? 

[cusideabelincoln]

The Google Home mini in my kitchen was beginning to randomly talk and answer questions more and more often and I just had to unplug it a few months ago, and haven't plugged it back in since.

 

After a few weeks, the Home Mini in the living room randomly announced itself a couple of times, but I have not heard it do so lately.

 

I was not speaking at all during these times. My house is quiet, although sometimes  you can hear the neighbors screaming across the street. However I noticed no audible sounds when Google randomly went off.

 

Maybe it's lonely? I really only use them to ask what the weather outside is and to set random alarm clocks.

[ort]

I think the echo spent a bunch of years as that fun cheap gift you buy for the person you have no idea what to get for a gift. It was cheap enough that you could get one for yourself or someone else without worrying about it.

 

Maybe they can charge $8 a month for access… seems to be a popular monotization strategy these days…

[Keyser_Soze]

You can use Alexa to play the Spanish radio station.

[Keyser_Soze]

28 minutes ago, skillzdadirecta said:

So Alexa is basically Amazon's Kinect eh? 

 

Funny Microsoft got so much flack on  Kinect. "It's spying on you" and all that surrounding it. Now Siri, Alexa, Echo, etc are all that and they do spy on you and record the sounds you make, but everyone's ok with it since it's not Microsoft I guess 🤷‍♀️

[GeneticBlueprint]

3 minutes ago, Keyser_Soze said:

 

Funny Microsoft got so much flack on  Kinect. "It's spying on you" and all that surrounding it. Now Siri, Alexa, Echo, etc are all that and they do spy on you and record the sounds you make, but everyone's ok with it since it's not Microsoft I guess 🤷‍♀️

I just gated Kinect because I hate dancing

[Ominous]

We use Alexa and Google to control the lights, thermostat, play live tv, listen to music and the news....works good enough for me. 

[Ominous]

1 hour ago, SuperSpreader said:

I only use voice control on Android Auto and it gets everything wrong 

 

Never had an issue with that either.

 

[Ghost_MH]

26 minutes ago, Keyser_Soze said:

Funny Microsoft got so much flack on  Kinect. "It's spying on you" and all that surrounding it. Now Siri, Alexa, Echo, etc are all that and they do spy on you and record the sounds you make, but everyone's ok with it since it's not Microsoft I guess 

 

People freak out far more over cameras microphones. Everyone tapes up the camera in their laptops, but nobody tapes up the mic...not that taping it up would really help all that much.

 

I have so many assistant devices everywhere in the house. They mainly get used for music, but also for a bunch of smart devices I have around the house including many of the lights. I assume my privacy was lost ages ago, so yolo, let's get the most out of this IoT shit.

 

Also, like kids. I can't stress enough how amazing it was the first time I was feeding one baby and could just yell at the TV to play an episode of Daniel Tiger without having to raise a finger.

[Ghost_MH]

1 minute ago, Ominous said:

Never had an issue with that either.

 

My oldest, 6 turning 7 next month, has a speech impediment. Enough so that it gets him on the special needs bus. Assistant understands him just fine. He controls the lights in his room and can even get PBS Kids on his TV via voice.

 

I'd say it's not trained on his voice, but who knows. He is totally the kid that would sit in a corner one day and just figure it out.

[Guest]

Not shocking, there are essentially two things that Amazon does to make profits: AWS and advertising sales

[rc0101]

2 hours ago, Ghost_MH said:

 

I've mentioned better that my 5yo is autistic. She doesn't really understand how language works even if she's perfectly capable of properly pronouncing words and is able to label things correctly and sing songs. Any words used correctly are just mimicry right now. Hopefully she'll understand then after more school and a ton of therapy.

 

Google Assistant is amazingly helpful when you have a kid that doesn't understand why you shouldn't turn in the light at 3am and start playing with your toys. No light switches in the room. She a smart light that takes voice commands. However, my daughter has picked up Assistant commands. Now after I tuck her in she says "Good night. I love you. Hey Google, turn off the girls' light".

 

Don't even get me started how nice it is to be able to bark at the TV while carrying around babies and have the TV just do what you want.

Hey just want to say that my daughter is 13 and has autism. She was basically in the same situation at that age, and is now going into high school with minimal aide help. I know it’s a spectrum but just want to say that therapy absolutely works (you know this) and there is hope. 

[Mr.Vic20]

5 hours ago, marioandsonic said:

I don't use voice-activated shit for anything...so I'm basically a peasant in comparison to all of you lol

My wife and I don't either. It seems a trivial gimmick. To quote my wife, "I'm not talking to a machine until we're all wearing uitards like Picard". 

[Anathema-]

I'll echo (wakka) the idea that taking care of kids/babies makes the value of voice control go up exponentially. 

[BloodyHell]

9 hours ago, Uaarkson said:

All this technology is bullshit because at the end of the day, touchscreens are just quicker and easier. Same reason VR will never replace mouse and keyboard. Some things aren’t broken and don’t need fixing.

Yup. 

We got my grandmother a remote/cable box that she can speak into, but thats because of her age and eye sight. Its hard for her to read text on screen. She presses a button, says the channel or show, it comes up and she hits the play button. It also says the name of the show if she moves up and down the guide. So this kind of tech isn't worthless, I just don't think it will ever be widespread. If it had been a smaller project to serve those with problems like impaired vision, or limited hand/finger mobility, Amazon probably could have had something. 

But overall, I have zero interest whatsoever in talking to my house. 

 

But as far as vr and mouse and keyboard, they are separate tech altogether. Vr is useless to personal computing, but mouse and keyboard are useless to vr. While VR requires a pc, it was never supposed to replace mouse/keyboard input methods, it's an addition to the pc. Alexa, otoh, is just a voice kb that most people don’t want.