Amazon Alexa is a “colossal failure,” on pace to lose $10 billion this year
Dopo Twitter, Meta e Google, mancava Amazon nel bollettino delle recenti difficoltà in Silicon Valley Sembra un fallimento del business model del Surveillance Capitalism, o è troppo presto per parlarne? <https://arstechnica.com/gadgets/2022/11/amazon-alexa-is-a-colossal-failure-o...> Would you pay a monthly fee for voice commands? — Layoffs reportedly hit the Alexa team hard as the company's biggest money loser. echo sphere Amazon is going through the biggest layoffs in the company's history right now, with a plan to eliminate some 10,000 jobs. One of the areas hit hardest is the Amazon Alexa voice assistant unit, which is apparently falling out of favor at the e-commerce giant. That's according to a report from Business Insider, which details "the swift downfall of the voice assistant and Amazon's larger hardware division." Alexa has been around for 10 years and has been a trailblazing voice assistant that was copied quite a bit by Google and Apple. Alexa never managed to create an ongoing revenue stream, though, so Alexa doesn't really make any money. The Alexa division is part of the "Worldwide Digital" group along with Amazon Prime video, and Business Insider says that division lost $3 billion in just the first quarter of 2022, with "the vast majority" of the losses blamed on Alexa. That is apparently double the losses of any other division, and the report says the hardware team is on pace to lose $10 billion this year. It sounds like Amazon is tired of burning through all that cash. A division in crisis The BI report spoke with "a dozen current and former employees on the company's hardware team," who described "a division in crisis." Just about every plan to monetize Alexa has failed, with one former employee calling Alexa "a colossal failure of imagination," and "a wasted opportunity." This month's layoffs are the end result of years of trying to turn things around. Alexa was given a huge runway at the company, back when it was reportedly the "pet project" of former CEO Jeff Bezos. An all-hands crisis meeting took place in 2019 to try to turn the monetization problem around, but that was fruitless. By late 2019, Alexa saw a hiring freeze, and Bezos started to lose interest in the project around 2020. Of course, Amazon now has an entirely new CEO, Andy Jassy, who apparently isn't as interested in protecting Alexa. The report says that while Alexa's Echo line is among the "best-selling items on Amazon, most of the devices sold at cost." One internal document described the business model by saying, "We want to make money when people use our devices, not when they buy our devices." That plan never really materialized, though. It's not like Alexa plays ad breaks after you use it, so the hope was that people would buy things on Amazon via their voice. Not many people want to trust an AI with spending their money or buying an item without seeing a picture or reading reviews. The report says that by year four of the Alexa experiment, "Alexa was getting a billion interactions a week, but most of those conversations were trivial commands to play music or ask about the weather." Those questions aren't monetizable. Amazon also tried to partner with companies for Alexa skills, so a voice command could buy a Domino's pizza or call an Uber, and Amazon could get a kickback. The report says: "By 2020, the team stopped posting sales targets because of the lack of use." The team also tried to paint Alexa as a halo product with users who are more likely to spend at Amazon, even if they aren't shopping by voice, but studies of that theory found that the "financial contribution" of those users "often fell short of expectations." In a public note to employees, Jassy said the company still has "conviction in pursuing" Alexa, but that's after making huge cuts to the Alexa team. One employee told Business Insider that currently, "There's no clear directive for devices" in the future, and that since the hardware isn't profitable, there's no clear incentive to keep iterating on popular products. That lack of direction led to the internally controversial $1,000 Astro robot, which is basically an Amazon Alexa on wheels. Business Insider's tracking now puts Alexa in third place in the US voice-assistant wars, with the Google Assistant at 81.5 million users, Apple's Siri at 77.6 million, and Alexa at 71.6 million. Are all voice assistants doomed? We have to wonder: Is time running out for Big Tech voice assistants? Everyone seems to be struggling with them. Google expressed basically identical problems with the Google Assistant business model last month. There's an inability to monetize the simple voice commands most consumers actually want to make, and all of Google's attempts to monetize assistants with display ads and company partnerships haven't worked. With the product sucking up server time and being a big money loser, Google responded just like Amazon by cutting resources to the division. While Google and Amazon hurt each other with an at-cost pricing war, Apple's smart speaker plans focused more on the bottom line. The original HomePod's $350 price was a lot more expensive than the competition, but that was probably a more sustainable business model. Apple's model didn't land with consumers, though, and the OG HomePod was killed in 2021. There's still a $99 "mini" version floating around, and Apple isn't giving up on the idea of a big speaker, with a comeback supposedly in the works. Siri can at least be a loss leader for iPhone sales, but Apple is also hunting around for more continual revenue from ads.
Buongiorno, Alberto Cammozzo via nexa <nexa@server-nexa.polito.it> writes:
Dopo Twitter, Meta e Google, mancava Amazon nel bollettino delle recenti difficoltà in Silicon Valley
Sembra un fallimento del business model del Surveillance Capitalism, o è troppo presto per parlarne?
Se "incrociamo i dati" anche con la crisi degli exchange di cryptovalite, FTX in primis, non credo si tratti "solo" del Surveillance (Captive?) Capitalism, io ci vedo dentro anche molta "innovation delusion", finanza creativa, crisi del military-industrial complex USA... qualcosa di più profondo, credo. Una frase che ho sentito da Giorgio Agamben (citazione di non ricordo chi) dice più o meno: «Le cose cominciano ad essere interessanti quando hanno fatto il loro tempo» Credo che un po' di cose che sembravano invincibili, quasi eterne, stiano mostrando segni di aver fatto il loro tempo e proprio per questo si fanno /molto/ interessanti... ma sì, è un po' presto per parlarne.
<https://arstechnica.com/gadgets/2022/11/amazon-alexa-is-a-colossal-failure-o...>
Al resoconto di Art Technica aggiungo quello di Business Insider che viene citato nell'articolo come fonte primaria: https://www.businessinsider.com/amazon-alexa-layoffs-insiders-describe-a-cri... «As Amazon's Alexa unit faces layoffs, insiders describe a department in crisis» --8<---------------cut here---------------start------------->8--- - During the first quarter of 2022, Amazon's "Worldwide Digital" unit, which includes everything from the Echo smart speakers and Alexa to Prime Video, had an operating loss of over $3 billion, internal data shows. - While Alexa was once one of the company's most rapidly growing projects, these mounting losses and massive job cuts underscore the swift downfall of the voice-assistant and Amazon's larger hardware division. - Employees told Insider a combination of low morale, failed monetization attempts, and lack of engagement across users and developers made them feel as though the team was deadlocked over the last few years. - "Alexa is a colossal failure of imagination," one former employee said. "It was a wasted opportunity." --8<---------------cut here---------------end--------------->8--- https://www.businessinsider.com/amazon-alexa-job-layoffs-rise-and-fall-2022-... (N.B.: l'articolo /pare/ essere dietro paywall perhcé leggo «This story is available exclusively to Insider subscribers. Become an Insider and start reading now.» ma siccome il browser che uso io ignora i javascript l'articolo lo leggo per intero) «Amazon is gutting its voice assistant, Alexa. Employees describe a division in crisis and huge losses on 'a wasted opportunity.'» --8<---------------cut here---------------start------------->8--- Alexa is on life support. When the voice assistant first launched in November 2014, publications called it the "computer of the future." CNET described it as something out of the sci-fi series "Star Trek." Computerworld heralded the product as the "future of every home." Nearly 10 years since, the voice assistant hasn't lived up to Amazon's expectations. [...] The vast majority of Worldwide Digital's losses were tied to Amazon's Alexa and other devices, a person familiar with the division told Insider. The loss was by far the largest among all of Amazon's business units and slightly double the losses from its still nascent physical stores and grocery business. While Amazon's business model has traditionally tolerated this kind of poor financial performance from its hardware businesses, that's no longer true. Amazon's Alexa and the devices team at large is now the prime target of the biggest layoffs in the company's history, according to press reports and an internal email seen by Insider. Insider spoke with over a dozen current and former employees on the company's hardware team to get a better picture of its current condition. They described a division in crisis. While Alexa was once one of the company's most rapidly growing projects, the mounting losses and massive job cuts underscore the swift downfall of the voice assistant and Amazon's larger hardware division. It also punctuates the failure of the company's much-replicated business model of selling devices at cost and to recuperate revenue from additional purchases later. Employees spoke under the condition of anonymity because they weren't authorized to speak with the press. Their identities are known to Insider. "Alexa is a colossal failure of imagination," one former employee said. "It was a wasted opportunity." While Amazon didn't respond to Insider's questions about the health of its devices and voice-assistant business, Amazon's senior vice president for devices and services, David Limp, said in a statement, "We are as committed as ever to Echo and Alexa, and will continue to invest heavily in them." [...] --8<---------------cut here---------------end--------------->8--- [...] Saluti, 380° -- 380° (Giovanni Biscuolo public alter ego) «Noi, incompetenti come siamo, non abbiamo alcun titolo per suggerire alcunché» Disinformation flourishes because many people care deeply about injustice but very few check the facts. Ask me about <https://stallmansupport.org>.
Buongiorno, Alberto Cammozzo via nexa <nexa@server-nexa.polito.it> writes: [...]
The report says that while Alexa's Echo line is among the "best-selling items on Amazon, most of the devices sold at cost." One internal document described the business model by saying, "We want to make money when people use our devices, not when they buy our devices."
That plan never really materialized, though. It's not like Alexa plays ad breaks after you use it, so the hope was that people would buy things on Amazon via their voice. Not many people want to trust an AI with spending their money or buying an item without seeing a picture or reading reviews. The report says that by year four of the Alexa experiment, "Alexa was getting a billion interactions a week, but most of those conversations were trivial commands to play music or ask about the weather." Those questions aren't monetizable.
Amazon also tried to partner with companies for Alexa skills, so a voice command could buy a Domino's pizza or call an Uber, and Amazon could get a kickback. The report says: "By 2020, the team stopped posting sales targets because of the lack of use."
[...]
Google expressed basically identical problems with the Google Assistant business model last month. There's an inability to monetize the simple voice commands most consumers actually want to make, and all of Google's attempts to monetize assistants with display ads and company partnerships haven't worked. With the product sucking up server time and being a big money loser, Google responded just like Amazon by cutting resources to the division.
[...] Quindi la domanda è: cosa succederà a tutti gli apparecchi voice assistant quando Amazon e Google decideranno di dismettere il servizio (aka spegnere il server) che gli permette di funzionare? --8<---------------cut here---------------start------------->8--- Unable to connect to the Amazon Alexa server. Please try again later. --8<---------------cut here---------------end--------------->8--- Saluti, 380° -- 380° (Giovanni Biscuolo public alter ego) «Noi, incompetenti come siamo, non abbiamo alcun titolo per suggerire alcunché» Disinformation flourishes because many people care deeply about injustice but very few check the facts. Ask me about <https://stallmansupport.org>.
participants (2)
-
380° -
Alberto Cammozzo