According to the Wall Street Journal,Voice Assistant Alexa ofAmazonThe business unit lost as much as $25 billion (currently about 182.1 billion yuan) between 2017 and 2021. Although Amazon claims to have sold more than 500,000 Alexa devices, including Echo smart speakers, Kindle e-book readers, etc., Alexa has always struggled to make a profit.
According to reports,Amazon takes a lighter touch with Alexa hardware division, giving priority to innovation and long-term returns. The company has made it clear that initial products do not need to be profitable.
Amazon once sold Echo smart speakers at low prices or even at a loss, hoping to make profits through Alexa services in the future. However, users mainly use Alexa for free services, such as checking the weather and time, and large-scale consumption is rare.
However, the huge losses did not affect the investment in product research and development. Amazon spared no expense in developing new products, such as the Astro home robot and the Halo health tracker, but most of these products failed to achieve commercial success.
Amazon used to use a metric called "downstream impact" to assess product value, which measures the value of a product based on how much money users spend within the Amazon ecosystem after purchasing the product. However, this metric has flaws and may have exaggerated the profitability of certain products.
To reverse the situation,Amazon plans to launch a subscription-based version of Alexa with generative AI, hoping to charge by providing more advanced features and services. However, industry insiders are not optimistic about this prospect. On the one hand, users are increasingly tired of subscription services; on the other hand, generative AI technology is still immature, and whether it can successfully subvert the voice assistant market is full of uncertainty.
In addition, Amazon also faces privacy issues. It has previously been exposed to scandals such as saving user voice recordings and monitoring user audio, which seriously damaged its reputation.
It is generally believed in the industry that Amazon's bet on generative AI Alexa is a high-risk attempt. Its success depends not only on technological breakthroughs, but also on whether Amazon can change users' perception of voice assistants and whether the company can overcome a series of challenges.