“Colossal failure”: How Alexa went from being a beacon of hope to a problem for Amazon
Amazon’s voice assistant Alexa has officially been demoted to a side project. The group wanted to use it to revolutionize everyday life. You just couldn’t make it palatable to the customers.
“By the way,…”: With this inconspicuous word, Amazon’s language assistant Alexa introduces suggestions for what else you can do with it after completing a command. And it not only annoys the customers enormously, but also reveals a very fundamental problem of the former beacon of hope: He simply could not meet his expectations.
This emerges from a detailed piece of “Insiders”. After Amazon announced last week that it would slash the hardware division, which includes the Alexa team, the magazine spoke to numerous current and former employees of the division. And their view seems unanimous: Amazon’s dream of the voice-controlled computer revolution has burst.
“Alexa is a colossal failure of the imagination,” said one employee bluntly. “It’s a completely missed opportunity.” At first the idea was big. As in the “Star Trek” series, for example, people should soon only be able to control computers with their voices, and simply say every wish into the room. Amazon founder Jeff Bezos was particularly enthusiastic about the idea. It is also thanks to him that the assistant can be started with “Computer” in addition to the code words “Alexa” or “Echo” – just like Captain Picard always did in “The Next Generation”.
The business model also sounded tempting: Because Amazon sold its speakers at cost price, they were very affordable for customers, the hurdle was low. The profit should come from the additional Amazon purchases that would then be made by the customers via the assistant. “We want to make money when our users use their devices, not when they buy them,” the insider said in an internal document. But that never happened. Despite a hugely successful start – Amazon sold five million Echos in the first year alone – numerous other devices with Alexa such as the Fire TV products or a microwave and countless attempts to promote monetization, the business slipped more and more into the lousy.
Nobody wants to shop with Alexa
The main problem was the users themselves. Although the amount of commands continues to increase, most users stick to a few that they actually use on a daily basis. They ask what time it is, set a timer for the eggs, and ask for songs to play. Of these three examples, only the music brings money – and then only if the user uses Amazon’s own music service.
The main source of income that was initially expected, shopping via Alexa and thus via Amazon, was never used in the way the group had hoped. Alexa boss David Limp already admitted in 2018 star-Interview that language is simply not a particularly good way to shop. While you can clearly define what you want to hear with music, it’s much more complex with the rest of Amazon’s offering. “You have to match size, cut, color, brand and a lot of other metadata” to find the desired product, he explained. And then customers can’t even see the result. You can find the whole interview here.
Apple’s example does not bring success
Other attempts by Amazon to generate revenue with Alexa were also unsuccessful. Based on the model of Apple’s Appstore, the company introduced an interface for so-called “skills” with which developers and companies can offer their own programs for the assistant. The idea: shops that buy through these skills would earn a commission for Amazon. But although many developers initially offered skills, user interest remained low. The skills got dusty. According to employees, participation in the specially founded Alexa fair continues to decrease every year, according to the “Insider”.
A solution to the interaction dilemma should be the “By the way…” from the introduction. Especially in English-speaking countries, Alexa – there under the phrase “By the way…” – offers more and more unsolicited tips on what else the voice assistant can be used for. Much to the annoyance of many users. At “Reddit” and other communities, complaints about the unsolicited tips are piling up, advice is exchanged to turn them off. However, they do not seem to have increased their commitment: With almost 10 billion dollars, Amazon’s hardware division is expected to make losses this year like never before.
Alexa on the decline
No wonder frustration has long prevailed in the Alexa team. Having grown to over 10,000 members by 2018, a hiring freeze was soon imposed and positions were not filled. Boss Jeff Bezos was also slowly but surely losing interest. At first he regularly visited the team enthusiastically and even personally approved the email marketing campaigns, but at some point that was over. The team quietly stopped informing him further, an employee reports to “Insider”.
The remaining members of the hardware division feel left alone. “There is no clear specification for devices,” complains one of the employees. “What do we want to achieve? To be the best? The cheapest? If even that is not clear, there are quickly different competing groups in the company.” Even the assurances from the company management are not very reassuring. Limp promised in a statement that they would continue to support Alexa and Echo. “And we will continue to invest heavily in it.”
But where this money ends up is another question. Bezos’ new favorite project is only indirectly related to Alexa and is highly controversial among employees, according to “Insider”. While Amazon wanted to reach as many people as possible with inexpensive devices for a long time, the Astro project stands for the opposite. The robot, which costs 1,000 euros, is intended to follow people around their homes and fulfill their wishes. It is controlled – via Alexa.
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