Alexa, how can you stay relevant and stop siphoning money from Amazon?
This is not an easy question to answer, and the future of Amazon Alexa has never felt so uncertain. In November, Business Insider reported that Alexa’s “and other devices” are expected to lose him $10 billion at Amazon in 2022. Big losses like this put a persistent problem in the spotlight. It’s a dilemma that other voice assistants also struggle with.
With Alexa embedded in a variety of Amazon-branded products, from speakers and smart displays to home robots and microwave ovens, the best way to survive has always been in front of us, in our living rooms. It was in
But that’s a long way off.
amazon alexa problem
After its introduction in 2014, Amazon Alexa, like competing voice assistants, struggled to make a profit and provide value to consumers beyond performing basic tasks like providing the weather. . Alexa’s challenges continue to mount, with Business Insider predicting that “most” of Amazon’s Worldwide Digital group (composed of Alexa, Fire TV, Echo speakers, Prime Video, etc.)’s $3 billion loss will be in 2022. It reportedly happened in the first quarter. It was associated with “Alexa and Other Devices”.
It’s at this point that people working on the Alexa side of the business are said to describe voice assistants as “a colossal failure of imagination” and a “wasted opportunity.” About 2,000 layoffs, which Amazon’s hardware chief Dave Limp told his CNBC, hit the Alexa division earlier.
Lack of involvement (of the right kind)
Amazon had no problem selling Alexa-enabled devices. The company also claims that engagement with Alexa will grow by 30% in 2022, with more than half of Alexa users shopping using the voice assistant. However, it’s unclear how much revenue Alexa makes, given reports of internal misgivings about declining engagement with Alexa.
The problem is that people tend to use Alexa. For example, it doesn’t check if it’s going to rain or make money, and many Alexa-powered devices seem to be sold at cost. Amazon hoped Alexa would drive purchases.
Alexa is most often associated with smart speakers, but this format doesn’t display ads, can’t display information like images or reviews, and doesn’t provide a great shopping experience.
However, there is one place where consumers can display items they might be tempted to spend money on and use Alexa to facilitate their purchases. Amazon’s Fire TV sets and streaming devices. If you’re using a product with a screen, it’s much easier to use Alexa to do things like grocery shopping.
Additionally, Alexa is good at recommending video streaming services to your users. Users who don’t want to use Alexa for grocery shopping may be more open to using it to find movies to rent, for example. And if your interaction with Alexa leads you to Prime Video, even better for Amazon.
At the same time, Amazon’s Fire TV and Prime Video businesses, both part of the same Worldwide Digital business, which are reportedly losing money, seem to be doing better than Alexa.
“Alexa, where can I find you? XYZ?”
Alexa’s situation looks shaky, but Amazon’s TV business is in much better shape.
On March 22nd, Amazon announced it had sold over 200 million Fire TV streaming devices and its own TV. In January 2022, that number was he 150 million. According to Amazon, the Fire TV set, which the company will launch in 2021, is the fastest-growing segment of its Fire TV business. The company expanded sales to Mexico, Germany and the UK last week.
Again, Alexa isn’t the only voice assistant to struggle. One of Amazon’s differentiators in this confusing space is TVs. The makers of the most popular voice assistants (Amazon, Apple, and Google) all make streaming devices, with Amazon and Apple offering their own streaming video services. Amazon is also currently the only company that sells its own branded TVs (although some TVs run the Google TV operating system). And since Fire TV and Alexa are both part of Amazon’s Worldwide Digital group, their businesses complement each other.
