Amazon Alexa appears to be a big flop with the e-commerce giant, According to Business Insider the voice assistant unit is one of the hardest hit. Alexa has been in existence for the last 10 years and was copied by Google and Apple as well but it never managed to create a running revenue stream.
The Alexa division forms part of the Worldwide Digital segment and that division has lost $3 billion in only the first quarter of 2022 with most of the losses due to Alexa.
Amazon’s recent layoffs have also
Been partly due to this and the division is likely to lose $10 billion this year. One employee on the company’s hardware team describes the voice assistant as “a colossal failure of the imagination” and “a wasted opportunity”.
This month’s retrenchment exercise is a result of years of trying to turn things around. Former CEO Jeff Bezos first saw Alexa as his pet project but began to lose interest in it in 2020. Its new CEO Andy Jassy isn’t as invested in the project.
The problem with Alexa is not that it is not selling well. It is one of the best-selling items on Amazon but it is just that the business model does not make money throughout. “We want to make money when people use our devices, not when they buy our devices,” reads an internal document.
Alexa and voice assistance business insider
Currently, according to Business Insider, Alexa is in third place among US voice assistants with Google Assistant at number one with 81.5 million users and Apple’s Siri at 77.6 million. Alexa is at 71.6 million.
Google appears to be having the same problem in terms of monetizing the voice assistant. The commands most people make are simple voice commands to play music or ask about the weather which is difficult to monetize.
In the meantime, Amazon will continue with its plan to layoff 10,000 jobs across the company.
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