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Amazon Alexa deemed a failure, on pace to cause a $10 billion loss

The smart home speaker by Amazon was one of a kind when released, but the demand for Alexa have severely decreased, causing a major loss.

Amazon Alexa

With a rise in the interest in smart homes, keeping up to date on smart home technology like the latest on Amazon Alexa will give you an edge. Amazon.com has this to say about the device:

“Alexa can turn your house into a smart home, allowing you to voice control Alexa compatible Smart Home devices like lights, cameras and plugs. Dim the lights, check the baby cam, or turn on the kettle using your compatible Echo device or the Alexa app. It really is the ‘smart’ way to live your life.”

Voice assistance was a marker for technology – some companies even made snippets here and there that awed the public. When Amazon’s Alexa showed up about 10 years ago, it blew the competition out of the water. Amazon Alexa became a bit of a trailblazer, not only in its finesse, but also in its implementation into different devices. Next thing you know, Google has created one of its own and we now all know Apple’s Siri.

We also know there is a lot of controversy about AI assistance. Even if you use it on a regular basis, there has been a time you believed it was listening and watching your every move. Those a bit more paranoid refuse to use the normally free service on phones or are simply not interested in buying products with voice assistants attached to them like the Amazon Echo for instance.

Amazon recently announced it would be laying off around 10,000 of its employees the majority of them projects to come from the voice assistant or Alexa department. Though Amazon Alexa is well known, it doesn’t actually make enough of a profit to hold its own.

According to Arstechnica, the World Wide Digital department that houses the Alexa and Video Prime portion of the company lost $3 Billion in the first quarter of 2022. The majority of those losses are sitting on Alexa’s shoulders and it’s predicted Alexa is headed toward a colossal failure for the year. It also doesn’t help to say that Amazon’s hardware team – those who make the Echo and Dot – are already on track to lose 10 billion this year alone.

Many believe that Alexa was a pet project for Jeff Bezos when he was the CEO. However, they stopped hiring for the division in 2019 and Bezos was no longer interested in the project come 2020. Now that Amazon is in the hands of Andy Jassy, Alexa is seemingly doomed.

Jassy has no interest in protecting an asset that cannot generate any money after being purchased.

After you buy an Alexa device, that’s it. Every attempt to monetize it after the purchase has simply failed. It has no way of monetizing after purchase, which is why it’s been on a downward slide since 2019.

I don’t see Alexa recovering from this. $10 to $13 billion loss at the end of the year between the hardware and voice departments is absurd. I think if any company has a chance to make voice assistance popular and grow, it’s Apple. I am not an iPhone user but I can appreciate Siri for what it is. Though it doesn’t particularly have the bells and whistles that Alexa does, it has the consumers for it. By this time next year, we will see if Amazon Alexa has weathered this tremendous hurricane it’s currently facing.

A native New Englander who migrated to Austin on a whim, Stephanie Dominique is a freelance copywriter, novelist, and certificate enthusiast. When she's not getting howled at by two dachshunds or inhaling enough sugar to put a giant into shock, she is reading, cooking or writing about her passions.

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