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

arstechnica.com

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

#291

Post by ericmay »

ben174 wrote: post #280
piva00 wrote: post #193

Earlier quoted context omitted.

Alexa-powered does not necessarily mean Alexa devices made by Amazon though. For example: I own a multiroom speaker setup not made by Amazon that is Alexa-enabled, all speakers could run Alexa if I had set them up for it (which I won't, ever), and they're very likely counted on this metric. I can remember a multitude of other speakers and devices with an Alexa-enabled badge on their packaging that aren't made by Amaz…

Assuming you're referring to Sonos -- while they were once the best, they seem to just not work well anymore. I'm lucky if I can get it to function correctly. I've observed my brother's Chromecast whole-home audio which cost him a fraction of the price and has a ton more variety - and I'm thinking I may ditch my Sonos setup.

Strange. I recently purchased some Sonos products and haven’t had any issues whatsoever. They’ve been absolutely fantastic for me.

What issues are you experiencing? Wonder if it’s something I can keep a look out for.

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

#292

Post by oblio »

lotsofpulp wrote: post #255
system2 wrote: post #190

$10B is a chump change for a trillion dollar company.

Market cap is not relevant to cash flow concerns. Not to mention that Amazon no longer has a $1T+ market cap.

Which is frankly ridiculous for a company with a yearly revenue of about $500bn and a growth rate topping 10%, even at that scale.

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

#293

Post by plif »

Eric_WVGG wrote: post #108
29athrowaway wrote: post #80

Earlier quoted context omitted.

I use Alexa for everything. - To ask for the weather, weather alerts, relative humidity, precipitation, wind speed - To ask about outdoor air quality, indoor air quality (requires air quality monitors) - As a baby monitor (crying detector routine) - To know when to empty the dehumidifier bucket (humidity > 60% routine) - To know when someone left the AC fan off (high CO2 routine) - To know when to open the window (hi…

so from the perspective of an executive trying to make money off it: utterly useless

I wouldn't say useless. He'll look to buy other smart peripherals that fit into the Alexa ecosystem, not a competitor's. It helps build up the brand. There's also a lot of data there to collect.

Maybe not the most lucrative revenue stream, but not nothing.

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

#294

Post by lotsofpulp »

oblio wrote: post #292
lotsofpulp wrote: post #255

Earlier quoted context omitted.

Market cap is not relevant to cash flow concerns. Not to mention that Amazon no longer has a $1T+ market cap.

Which is frankly ridiculous for a company with a yearly revenue of about $500bn and a growth rate topping 10%, even at that scale.

Revenue is not the whole picture either, or growth rate.

If it is all loss making or tiny low single digit profit margin, then a $10B loss is still a $10B loss.

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

#295

Post by thrtythreeforty »

akiselev wrote: post #290
MMAesawy wrote: post #174

Earlier quoted context omitted.

Even if it's Amazon paying Amazon, there is an opportunity cost to using all those cloud resources. Every resource used internally is a resource not available for sale externally.

One of the main selling points of the cloud is dynamic scaling which necessitates that Amazon have enough servers for some multiple of their customers’ base load. As long as internal Amazon resources are given a lower priority and booted in favor of customers during leak load, the opportunity cost is basically zero leaving just the marginal cost of electricity and hardware maintenance.

I am fairly certain this does not happen. An internal AWS customer account can have numerous flags associated with it but "boot me out first" isn't one of them (aside from spot instances that everyone has access to).

Source: work at AWS

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

#296

Post by luckylion »

mcphage wrote: post #289
consp wrote: post #213

Earlier quoted context omitted.

Nice numbers but don't those Alexa enabled device bring in revenue offsetting the cost and limiting the loss? Or doesn't anyone have an Amazon premium account or buy anything with Alexa on Amazon?

We have I think… 5? Echo devices in my house, including an echo dot Amazon just sold me for $1 because it was my “Primeaversary". I haven’t purchased a single thing through them.

"Hey Alexa, I need a new pan, mine is old and broken" - "I have the Pan Frying Pan Cooking Pan Cooking Children Family Happy Best Pan from Fhrgwdsst for $14.99, would you like me to order it for you?"

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

#297

Post by sgerenser »

laurencerowe wrote: post #118
putlake wrote: post #105

Earlier quoted context omitted.

From what I've heard, AWS prices for large customers like Netflix are a lot lower than for Alexa or Amazon Retail. Netflix has the option to switch to GCP or Azure; Alexa doesn't so they don't get those discounts.

That honestly surprises me. Having worked at a small subsidiary of a different big tech giant our costs for the big tech's cloud were charged at cost price at the behest of the accountants.

No actual knowledge of the details, but the story I’ve heard at Microsoft is similar to the AWS one: internal users of Azure pay the same (based on volume and service level) as an external customer would. Supposedly their capacity constrained so any extra compute being used internally can’t be sold externally.

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

#298

Post by billychuck21st »

Voice assistant of today has really struggled to prove its value. Most of the things they do can be done with better accuracy by a few clicks on the phone. I think Voice assistant will be useful one day when it's really combined with other more "physical" AI and automation.

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

#299

Post by mcphage »

luckylion wrote: post #296
mcphage wrote: post #289

Earlier quoted context omitted.

We have I think… 5? Echo devices in my house, including an echo dot Amazon just sold me for $1 because it was my “Primeaversary". I haven’t purchased a single thing through them.

"Hey Alexa, I need a new pan, mine is old and broken" - "I have the Pan Frying Pan Cooking Pan Cooking Children Family Happy Best Pan from Fhrgwdsst for $14.99, would you like me to order it for you?"

I think my favorite notification was a few months ago—my echo speaker turned yellow because there was a notification. My kids find this incredibly exciting, and told Alexa to play it. And then Alexa announced to us, in breathless terms, that bananas are a good source of potassium. It even said "this is B A N A N A S", as only a robot can.

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

#300

Post by simplotek »

db1234 wrote: post #170
slaw wrote: post #60

Earlier quoted context omitted.

> This year, an employee familiar with the hardware team said, the company is on pace to lose about $10 billion on Alexa and other devices. Creative journalism or creative accounting.

To me this looks like a deliberate leak from Amazon. Why? I don't know. Perhaps a signal to wall street that more layoffs are coming to Alexa division?

> To me this looks like a deliberate leak from Amazon.

That was what I thought as well. Whether to sugarcoat propr or upcoming layoffs, this niewspiece sounds like a justification in the public's eye of why everyone at Amazon is getting the axe.

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