Alexa Is in Millions of Households—and Amazon Is Losing Billions

tech
Created 7/22/2024
Updated 7/22/2024

Amazon's Echo speakers, initially sold cheaply to boost sales, have resulted in massive losses, contrary to the company's expectations. The strategy of driving revenue through Alexa-based purchases failed, as users mainly utilized free features like alarms and weather updates. From 2017 to 2021, Amazon's devices division, including Echos, Kindles, and Fire TV Sticks, incurred losses exceeding USD25 billion. CEO Andy Jassy, aiming to reverse this, is launching a paid Alexa tier but faces skepticism about its potential success. Despite extensive investments and innovations, including the costly Astro robot, Amazon's device business struggles to find profitability.

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