“Alexa Projected to Lose $10 Billion” Digital Virtual Assistant Near the Doomsday

The criteria that define success in the digital world vary. It can be the number of users, or it can be a big profit. Based on the former, the performance of digital virtual assistants from Google, Apple, and Amazon isn’t too bad. According to Business Insider, Alexa has 71.6 million users. Apple Siri and Google Assistant have 77.6 million and 81.5 million users, respectively.
ⓒ Amazon

But from a profitability perspective, the balance sheet is not promising. According to Ars Technica, all three virtual assistants have yet to succeed in creating a business. This is because monetization is impossible with simple voice commands that most users actually use. Most of them ask for the weather or time, or to play specific music. Attempts to monetize display advertising, voice advertising, and corporate partnerships have so far failed. For example, Amazon has made many attempts to provide Alexa skills to businesses, such as ordering a Domino’s pizza or calling an Uber ride with a voice command, and Amazon collecting a fee.

Attempts to monetize the Google Assistant have also failed. According to Ars Technica, Google Assistant took up too much server uptime, only increasing the loss. Google has now cut budgets for related departments. Apple is no different. To date, Siri has not been able to generate consistent revenue.

But Apple avoided making the same mistakes Amazon and Google made by not joining in a disruptive price war. Apple is selling its HomePod smart speaker for $350, which is prohibitively expensive compared to the competition. However, Apple products were also not well received by consumers, and the HomePod was discontinued in 2021. Of course, since the $99 mini version is still around, and Apple hasn’t given up on the big speaker idea, it’s hard to call it a failure.

Amazon doesn’t appear to be making any money off its Alexa-powered Echo devices. It’s a popular product on Amazon, but mostly because it’s sold at a very low price. Amazon’s business model, described in internal documents, was “we make money when people use our devices, not when we sell them.” This strategy has obviously failed.

Amazon’s Worldwide Digital Group, which includes Alexa and Amazon Prime Video, posted a $3 billion loss in the first quarter of 2022 alone. Most of these are related to Alexa. That’s more than twice the loss of any other division, and the hardware division is expected to post a loss of $10 billion this year. Now, Amazon seems to be reaching a point where it’s going to tire of losing money.

As for related performance, Amazon CEO Andy Jassy now wants to pull the parachute cord. Recruitment of related personnel has been suspended since the end of 2019, but it is known that Alexa will be most affected by Amazon’s recently announced restructuring of 10,000 employees.
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Source: ITWorld Korea by www.itworld.co.kr.

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