Amazon Alexa is on pace to lose $10B this year

I'll add little bit of context from Kindle Reader which was developed while I was at Amazon. Though I was in no way involved with it I frequently interacted with senior folks who were.

For first few years, Kindle Reader was a massive sink hole at multiple levels. There was this humongous R&D cost, hardware and software. On a recurring basis Amazon absorbed cellular data charges. Remember this was in early 2008 so cellular data charges were big and since this was the first couple of iterations of product the data sync protocol was yet to be optimised so data intensive. For example, the device would phone home every hour or so to fetch new book purchases and metadata such as bookmarks, last read pages etc., It also included a basic web browser. And finally, the unit economics of selling digital books were terrible. Because Amazon was trying to create a new habit they had to incentivise readers with discounts, even without discount they were losing about 4$/book sold.

So all in all this all seemed like a giant resource consuming operation with no hope of generating any profit. But boy did it succeed. Within about 4 years or so kindle books were outselling physical copies something like 3-1. And now I think it's not even worth comparing.

My suspicion is execs expected Alexa ecosystem to follow Kindle's trajectory of success which doesn't seem to have materialised.

Maybe, but it’s a legitimately hard problem. Sort by lowest price legitimately means show the lowest price item first, even if it’s less relevant.

Based on other search systems I have worked with, they probably have an initial fast filter that limits the items from the entire inventory to a loosely matching set (erring on the side of including irrelevant items). Then a more intelligent and expensive ranking system would be used to find the best items from that set (where “best” means a bunch of things including relevance and profitability). Selecting “price: low to high” probably bypasses the intelligent system, so you end up with crap at the top of the list.

The low-priced items could be doing some kind of SEO scam to get on the list, or it could be something innocent like a fuzzy match to text in the description (could be a dumb issue like tf-idf that randomly exceeds a threshold due to noise).

You could argue that if they don’t prioritize the investment to fix these issues, it’s in some sense intentional. Nobody sorts by low price, because it gives poor results, because they don’t bother fixing it, because it’s not a priority, because nobody sorts by low price…

People want voice control because they see it in movies and TV.

But what they forget that the only reason movies and TV have it in the first place is because that way the audience hears what the character wants!

It's not because it's actually a better interface - because it's not!

Same with glass interfaces with no buttons - they make them because they are cheaper, not because it's better. But they look really cool, so people start to think they are actually better.

I'm sure there are tons more examples of things people think are done because they are better, but are actually done to save money or for some unrelated reason.

Maybe shoelaces that are laced inside-out. In the box they want the ends to point inward, but when you wear them you are supposed to relace them so they end up pointing outward.

I wonder how many of those could be run device-local on 2-4 year old smartphone equivalent hardware (so, something you could build today and sell for <$300 as an Echo-equivalent) with some kind of trust-minimized cloud backend (or homekit, etc. integration for local device control).