2 min read

Is It The End of Amazon Alexa?

Remember when it was common to view voice as the main user interface of the future? The tech community believed that voice assistants would usher in a new era of digital convenience in the 2020s. I wrote a lot about voice from 2017-2019. At one point, I even spoke at a conference called Project Voice that was entirely dedicated to voice interfaces.

Obviously, this future never materialized. And now Amazon appears to be abandoning its Alexa unit, being the primary target for layoffs.

During the first quarter of this year, Amazon's "Worldwide Digital" unit, which includes everything from the Echo smart speakers and Alexa voice technology to the Prime Video streaming service, had an operating loss of over $3 billion, according to internal data obtained by Insider.

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. – Business Insider

Amazon’s idea with Alexa was to create another “AWS tax” on the Internet, finding a way to collect money via the infrastructure layer of all transactions. Getting hardware in hands was the priority, as they wanted to make money when people used the devices, not when they bought them.

By 2018, the division was already a money- losing pit. That year, the New York Times reported that it lost roughly $5 billion. This year, an employee familiar with the hardware team said the company is on pace to lose around $10 billion on Alexa and other devices. – Business Insider

For the most part, Alexa prevailed over all of its privacy concerns they were met with. Whether it was employees listening in on conversations or the devices sending messages to the wrong people.

The problem for Alexa lied in usage. Amazon attempted to make the Skills app catch on, a tool which allowed developers to create voice-activated shortcuts for things like ordering a pizza. Companies including Uber, Disney, and Domino’s Pizza created voice shortcuts, but user’s just weren’t interested in adopting this voice-activated behavior. Thus, a true developer community akin to the Apple App Store developer community never formed.

The fact of the matter is that user’s never became accustomed to asking Alexa (another other assistants) for anything other than the weather, music, and simple Google questions.

Voice isn’t a dead user interface. However, it’s found its place in our society as a ubiquitous feature that the we just expect to work when our hands are full. But even then, voice doesn’t work that well where it should, like Siri in the car.

Google Assistant is the biggest winner here because they didn’t rely on selling home devices to gain significant traction. It’s a sad that we may never see another major update from Alexa. I just hope they continue to supports all the Alexa smart home stuff they’ve sold us over the years.