Amazon plans to introduce its new Alexa subscription this month, which unlocks a smarter version of the assistant, The Wall Street Journal reports. The schedule described in the report would initially refer to the USA – it is unclear whether the Alexa subscription will come to Germany.
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Between 2017 and 2021, Amazon lost $25 million on Alexa, The Wall Street Journal writes In its report, which is based on conversations with former employees, one reason why Amazon has tolerated losses for so long is believed to be the “downstream effect,” an internal business metric established by former boss Jeff Bezos. This means: Amazon sold its Alexa devices without making any direct profit. There are said to be several hundred million of them in homes worldwide. The hope was that buyers would buy their Echo speakers on Amazon and thus funnel profits into their coffers elsewhere.
Thanks to this, the Alexa team was able to take a share of Amazon’s shopping sales, writes the Wall Street Journal. However, there was apparently no evidence that this proportion could actually be attributed to the Echo speaker.
Indeed, one former employee told the Wall Street Journal that Alexa barely impacted shopping sales. Rather, users are said to have used their Echo to set timers and check the weather. Another former Amazon employee told the WSJ, “We were worried that we hired 10,000 people and built a smart alarm clock.”
The change in strategy eventually happened under new CEO Andy Jassy, who was installed in 2021: According to a Wall Street Journal report, Jassy wants to make Alexa highly profitable. This initiative plans to offer a subscription to an upgraded version of Alexa. This “Remarkable Alexa” is said to be smarter than the previous product, but it costs a monthly fee.
about suitable schemes Reuters had already reported. Accordingly, Amazon is considering offering the assistant, expected to be called “Remarkable Alexa”, for a monthly fee of US$5 to US$10. Improved Alexa is planned as an optional additional offer. This means that Alexa’s existing functions will continue to be available for free – only new features may disappear behind a paywall.
Employees who spoke to Reuters and the Wall Street Journal are skeptical about these plans. Little progress is being made in the development of a smart Alexa. “The technology is not there, but there is a deadline,” one former employee told the WSJ.
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