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Report: Amazon Alexa Is a ‘Colossal Failure’ on Pace to Lose $10 Billion This Year

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Ron Amadeo, writing for Ars Technica:

Amazon is going through the biggest layoffs in the company’s history right now, with a plan to eliminate some 10,000 jobs. One of the areas hit hardest is the Amazon Alexa voice assistant unit, which is apparently falling out of favor at the e-commerce giant. That’s according to a report from Business Insider, which details “the swift downfall of the voice assistant and Amazon’s larger hardware division.”

Alexa has been around for 10 years and has been a trailblazing voice assistant that was copied quite a bit by Google and Apple. Alexa never managed to create an ongoing revenue stream, though, so Alexa doesn’t really make any money. The Alexa division is part of the “Worldwide Digital” group along with Amazon Prime video, and Business Insider says that division lost $3 billion in just the first quarter of 2022, with “the vast majority” of the losses blamed on Alexa. That is apparently double the losses of any other division, and the report says the hardware team is on pace to lose $10 billion this year. It sounds like Amazon is tired of burning through all that cash.

The BI report spoke with “a dozen current and former employees on the company’s hardware team,” who described “a division in crisis.” Just about every plan to monetize Alexa has failed, with one former employee calling Alexa “a colossal failure of imagination,” and “a wasted opportunity.” This month’s layoffs are the end result of years of trying to turn things around. Alexa was given a huge runway at the company, back when it was reportedly the “pet project” of former CEO Jeff Bezos.

It’s enough to make you think that HomePods aren’t expensive; it’s just that Alexa devices have been sold at a loss over the years. Also interesting that Siri (with some justification) has always been considered the worst of the big three voice assistants, and that it was held back technically (compared to Alexa and Google Assistant) by Apple’s commitment to privacy and on-device processing. The thing about Siri is that it was always at heart about making Apple’s platforms more accessible. Siri is there to make iPhones, iPads, Macs, Apple TVs, Apple Watches, and even AirPods better. And Apple isn’t losing money on any of those. Siri will serve the same purpose on future platforms from Apple, too. Apple’s investments in Siri are part and parcel investments in their OS strategy for everything they make.

What is (was?) Alexa about, strategically? I’ve often heard that the vague idea was that people would buy Alexa devices for obvious stuff (playing music, setting timers) but that eventually they’d starting using Alexa to buy stuff from Amazon — and thus wind up buying more stuff from Amazon than they would if they didn’t have an Alexa device in their house. That never made sense to me. Buying stuff via voice commands seems inherently uncertain — like buying a lottery ticket where you need some luck to actually get the product you think you told Alexa to buy. Even if it works, how is it any better than just shopping at Amazon on your phone, iPad, or computer? It seems worse to me, and no more convenient. How do you comparison shop via voice?

For any task X on a new platform, if doing X is not far easier than just doing X on your phone, X is never going to be a reason to use that new platform.

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Intendedeffect
70 days ago
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Choosing what to buy on Amazon isn’t easy, and I’m not surprised people do not trust a voice assistant to do it. If you want more cereal, will you end up with six boxes, or with a single battered box drop-shipped from Walmart a week later? If you need batteries will they come at a ridiculous cost or will you get knockoff duracells? If you ask for an iPhone charger, will it be one from a no-name brand that catches on fire?
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jheiss
71 days ago
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I have close to 20 Alexa devices that get used primarily for home automation and music. They're extremely handy, and Amazon is getting $15 a month for a music subscription that would probably otherwise go to a competitor. But yeah, the business case for them always seemed kinda vague.

Steven Levy: ‘What the Apple Watch Means for the Age of Notifications’

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Steven Levy, writing for Medium’s Backchannel:

We aren’t at that level of desperation yet with online notifications. But the Age of Notifications is about to face its biggest mess yet, as alerts move from phone screens to watch faces. Notifications are just about the entire point of a smart watch — you’re not going to be reading books, watching movies or doing spreadsheets on them.

I disagree, strongly, that “notifications are just about the entire point of a smart watch” — or at least for Apple Watch. There’s a reason why Apple didn’t mention notifications prominently at either of their Apple Watch events. Take another look at Apple’s Watch pages on their website, and see how much attention is paid to notifications.

But, notifications are without question one of many important features. And if you feel like your watch is more annoying than helpful, you’re not going to wear that watch. One of the most important pieces on Apple Watch in the last few weeks was Jeremy Keith’s, which wasn’t about the Apple Watch itself but rather about being ruthlessly parsimonious with regard to allowing apps to send you notifications in the first place.

Back to Levy:

So what’s the solution? We need a great artificial intelligence effort to comb through our information, assess the urgency and relevance, and use a deep knowledge of who we are and what we think is important to deliver the right notifications at the right time. As time goes on, we will trust such a system to effectively filter all our information and dole it out just as needed.

I think he’s on to something here: some sort of AI for filtering notification does seem useful. I can imagine helping it by being able to give (a) a thumbs-down to a notification that went through to your watch that you didn’t want to see there; and (b) a thumbs-up to a notification on your phone or PC that wasn’t filtered through to your more personal devices but which you wish had been.

But: this sounds too much like spam filtering to me. True spam is unasked-for. Notifications are all things for which you explicitly opted in, and can opt out of at any moment.

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Intendedeffect
2848 days ago
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I've been using the new Outlook on my phone for email, and main reason I've stuck with it is that its filtering is smart enough that I only see notifications for email I definitely want to read. So much easier than trying to achieve the same thing in the built-in Mail app using a carefully-managed VIP list.
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jhamill
2849 days ago
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Sounds like Google Now to me - get the information you need when you need it - is the whole premise of Now. And is extremely useful.
California

WSJ Pours Cold Water on Bloomberg Report of Google Developing Uber Competitor

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Rolfe Winkler and Douglas MacMillan, writing for WSJ Digits:

What might have been a budding partnership suddenly appeared to boil over into a pitched rivalry on Monday. Besides Uber’s disclosure that it will work on its own self-driving car technology, a Bloomberg Business report citing a source close to Uber’s board said Google is prepping its own car-hailing service, most likely in conjunction with its self-driving car project. The report said the Uber board had seen screenshots of what appears to be a ride-sharing app being used by Google employees and that the Uber board is considering whether to ask Drummond to leave the board.

But a person familiar with the matter said news that Google is developing an app to rival Uber has been blown out of proportion. The person said a Google engineer has been testing an internal app that helps Google employees carpool to work, and the app isn’t associated with the company’s driverless cars program.

Feels like a non-denial denial to me — but perhaps I’m too cynical regarding Google’s history of backstabbing former partners.

My hunch: Google rolls out driverless cabs as soon as they’re legally able, localized at first in the Bay area. They undercut Uber pricing dramatically, with targeted ads based on your Google profile — and do things like play music you like or show you YouTube videos.

profile.

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Intendedeffect
2919 days ago
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You could put Mozilla in that group, too, though the problems with Firefox certainly contributed heavily to that divorce.
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aaronwe
2920 days ago
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What former partners has Google backstabbed? (Serious, not trolling.) I presume he's referring to Apple, but I'm having trouble coming up with an incident I'd describe as backstabby.
Denver
ahem1234
2920 days ago
He's talking about Apple. Not sure what the plural would refer to though...
invinciblegod
2920 days ago
Well, obvious answer is when Google was on Apples board and had some knowledge of the iphone. Besides from that, I can't really think of any.
ahem1234
2920 days ago
Now that I think about it, he could be referring to the fact that they licensed out Android and later developed their own phone products, going so far as to buy Motorola just to make their own phones...
aaronwe
2920 days ago
Yeah, I suppose that could seem backstabby if you squint at it right, but it's not like Moto made a dent in Samsung's sales.