If there is a set of smart home devices The ones that have become popular in recent years have been Amazon with Alexa, but the distribution giant does not seem to be able to make the calculations.
They have sold hundreds of millions of devices like Echo speakers, Fire TV and Sticksbut paradoxically, in doing so they have also left billions of dollars behind.
Millions of devices sold: the measure of success?
Alexa hasn’t turned out to be the moneymaker they had hoped for, and now Andy Jassy and his team are looking for solutions, according to WSJ, where it is revealed that an Amazon spokeswoman confirmed that having hundreds of millions of devices is for them “the best measure of success”.
Data collected by the newspaper indicate that between 2017 and 2021 Amazon has lost more than 25 billion dollars Perhaps because the Echo and Fire TV have tried to follow a well-known model: selling them at a loss, then recouping that portion and making a profit from services and products purchased on those devices.
Image: Amazon
It is what Amazon achieved with the Kindleprinter manufacturers with the purchase of cartridges or what video game console companies have been doing for some time by amortizing costs through the sale of games or subscriptions.
But in Amazon’s device division things don’t seem to have worked out quite as well. It was supposed to be Alexa was going to be a revolution in the way we relate to technology, but its Skills have not really taken off beyond a few uses.
Other products such as the video game streaming platform Luna were a theoretically good argument to boost sales of Fire TV Sticks, games and accessories, but it didn’t quite catch on either. At first it didn’t seem to matter, because the company’s vision wasn’t focused on immediate profits, but with the arrival of Andy Jassy, a leader focused on making profits, the strategy could take a significant turn.
The future of Alexa speakers also seems compromised. The company is now working on a supercharged version of the assistant called “Remarkable Alexa” where generative AI models will be the protagonists and theoretically offer improved performance… as long as we pay extra for it. Products such as Echo Frames smart glasses could also evolve in this direction and thus compete with proposals such as those from Meta and Ray-Ban.
What does all this mean for the user? Well, The era of very cheap Amazon smart devices that are sold even at or below cost could come to an end, something necessary for the company’s profits, but which may not encourage many customers to make the switch unless a Really innovative and useful product and different from the competition.
Cover image | Amazon
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