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  * Amazon Alexa Deemed 'Colossal Failure' Following $10 Billion Loss

Amazon Alexa Deemed 'Colossal Failure' Following $10 Billion Loss

  * By Adrianna Nine on November 23, 2022 at 10:03 am
  * Comments

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470143-amazon-echo-alexa

Eight years into Alexa's existence, Amazon has decided the smart
assistant hasn't been worth all the hype. The retail giant's most
recognizable product has generated a multi-billion dollar loss during
its tenure while failing to accomplish what it was made to do: sell
more stuff.

Amazon's "Worldwide Digital" unit, which manages Alexa's AI and
various hardware, lost over $3 billion in the first quarter of 2022
alone, reports Business Insider. According to the internal data
Insider obtained, this loss was "by far" the largest of all Amazon's
divisions--and most of it was associated with Alexa specifically.

Alexa (and the hardware it operates through, like Echo, Fire TV, and
Kindle) are products in and of themselves, but they're not exactly
major money-makers on their own. Instead, they serve as loss leaders,
or unprofitable products that exist to get a customer's foot in the
door. Amazon isn't shy about wanting you to use Alexa to place more
Amazon orders; in fact, many of the company's TV and web ads depict
this exact capability. But no one's doing that.

Amazon Echo Dot

(Photo: Amazon)

Since the beginning, Alexa has been more a novelty than an integral
part of Amazon customers' everyday lives. Back when Alexa launched in
2014, it was cool to be able to ask your Bluetooth speaker to talk
about the weather or crack a joke. Now that technology isn't nearly
as impressive, and while Worldwide Digital has given Alexa more
capabilities over time, many of them are things customers find
largely impractical or creepy. Add that to Alexa's constant
controversy, and you have a product many people hardly want to have
in their homes in the first place, let alone use. It's no longer out
of the question to find an iteration of the Echo (perhaps the most
recognizable Alexa-powered device) at your local Goodwill.

"Alexa is a colossal failure of imagination," a former Amazon
employee told Insider.

It's only fair that those who have kept their Alexa devices aren't
keen on submitting Amazon orders through them. Shopping on Amazon's
web and mobile pages can already be overwhelming enough with all of
the site's options; who wants to endure that process without actually
looking at product listings? It's risky to purchase an item
sight-unseen, and though Amazon reviews are of dubious reliability,
they're still helpful to customers who are torn between a few similar
products.

Now Alexa and its associated devices are likely to hit $10 billion in
total losses by the end of 2022. This isn't great news for Amazon
employees, approximately 10,000 of whom are expected to lose their
jobs in the coming months. Worldwide Digital is on particularly thin
ice following reports that Alexa-focused employees will mainly be
affected.

Now Read:

  * Amazon Shows Off Updated Prime Delivery Drone It Hopes to Launch
    in 2024
  * Lawsuit: Apple and Amazon Conspired to Raise iPad and iPhone
    Prices
  * In Buying Roomba, Amazon Increases Its Presence in Your Home

Tagged In

  * Alexa
  * amazon echo
  * Amazon Alexa
  * smart speaker
  * smart assistant

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