future uncertainAmazon has a huge loss of $10 billion with Alexa
It’s well known that the device division of transportation and entertainment giant Amazon is in the red. But a new report shows just how much money Amazon is burning with it — and speculates about the end of Alexa & Co.
Amazon grew through mail order, but has continued to expand and now also delivers music, Series and movies from one source. To make it as easy as possible for users to control entertainment electronics, the group has relied on its own Alexa voice control system for years. And these, so «Computer-Bild» is said to have sold well and is now used in countless homes around the world.
However, Amazon’s device division is and remains a problem child for the company. It was announced over a week ago that the company did 10,000 job cuts to consider — apparently mainly due to slow business with its Echo smart speakers and Alexa language assistant program.
Three billion loss for the quarter
But only a new report that appeared in “Business Insider” (paid article) gives concrete numbers: According to it, the Worldwide Digital division – under which the streaming service Prime Video falls – is said to have reported a loss of three billion dollars in the first quarter of 2022 alone. Amazon even predicts that the division will end in 2022 with a loss of ten billion US dollars.
According to Business Insider, the reason for these enormous losses is the low selling price of Alexa devices, which, according to the strategy, are supposed to strengthen customer loyalty, but did not bring the desired effect. Because even though Alexa is widespread and you can use it to order pizzas and call Uber taxis, Amazon’s revenue clearly hasn’t grown as much as expected. The tighter customer loyalty that Amazon has sought through voice control has reportedly had less of an impact than hoped.
As this continues, Alexa’s future should also hang in the balance. However, an Amazon executive told Business Insider that they are “as committed to Echo and Alexa as ever” and will continue to invest in the division.
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