Amazon Echo Show 8 with Alexa Faces Pressure to Generate Revenue
In a recent report by Business Insider, an anonymous Amazon employee expressed concerns about the future of Alexa, stating, “If this fails to get revenue, Alexa is in trouble.” The upcoming subscription version of Alexa is seen as a crucial opportunity for Amazon to drive revenue in ways that its voice assistant has struggled to do in the past.
Voice assistants, including Alexa, have faced challenges in generating revenue as users primarily use them for basic queries rather than transactions. To address this issue, Amazon announced plans to release a generative AI version of Alexa that would eventually require a subscription. However, convincing users to change their usage habits and pay a monthly fee for unprecedented behavior poses a significant challenge.
Internal tensions within Amazon reflect these concerns. Some employees question the premise of charging for Alexa, especially for those who already pay for existing Amazon services like Amazon Music. “There is tension over whether people will pay for Alexa or not,” one anonymous Amazon worker stated.
While Amazon has not publicly confirmed a release date for the generative AI Alexa, internal documents and sources cited by Insider suggest a planned release on June 30. However, development challenges may delay the launch of what is expected to be called “Alexa Plus” and built on “Remarkable Alexa” technology. The current version of Remarkable Alexa has shown promise in being conversational but struggles with deflecting answers and providing accurate responses.
The development process has been complicated by the insistence of using the existing technology from the standard voice assistant for the paid-for version. This has resulted in a bloated technology and internal politics. To overcome these challenges, generative AI Alexa is reportedly moving to a new technological stack to avoid the “legacy constraints” of the current version.
Amazon’s need to turn Alexa into a viable revenue source is undeniable. In 2022, Alexa was projected to cost Amazon $10 billion, leading to subsequent layoffs within the company. However, getting customers to use Alexa in revenue-driving ways remains a significant hurdle. Additionally, the research and development of generative AI is expensive, further adding to the pressure on Amazon.
While Amazon aims to make Alexa “remarkable” before charging for it, the June target date may be too soon. The success of Amazon’s generative AI version relies on meeting or surpassing user expectations. Users are unlikely to embrace a subscription-based Alexa if it comes with glitches, inaccuracies, and inconveniences. Privacy concerns associated with Alexa also add to the challenges faced by Amazon.
Time is of the essence for Amazon as it strives to catch up in the voice assistant market. A rushed and imperfect debut could hinder its success. With paid-for voice assistants already facing difficulties in gaining traction, the Alexa team has a tough task ahead.
Source: Business Insider