The revamped Amazon Alexa subscription tier could launch as soon as this month, according to a report on Wednesday.
Citing knowledge of ‘internal documents’ from Amazon, the Wall Street Journal reports the paid-for voice assistant is coming despite internal concerns about whether it’ll actually attract subscribers.
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This “more conversational” version of Alexa, which could cost up to $10 a month according to a Reuters report earlier this year, would use generative AI to close the gap on the likes of Google Gemini and OpenAI’s ChatGPT.
The report focuses on the “billions” Amazon is supposedly losing billions because of the low prices of Echo speakers, smart displays and other Alexa-powered gadgets. Despite Amazon’s hopes that revenue would be recouped by income generated by shopping via Alexa, and other things, that hasn’t been the case. It has left what the report says is a $25 billion hole in the coffers.
“Echo speakers are the type of business success companies don’t want: a widely purchased product that is also a giant money loser,” the report says. “Chief Executive Andy Jassy is trying to plug that hole—and move away from the Amazon accounting tactic that helped create it.”
That accounting tactic, the WSJ says, is called “downstream impact” which Amazon hoped was going to drive new revenues to justify the low cost of those Echo speakers which are often available for half price of what is already a undervalued price.
Amazon issued a statement to Geekwire on the report: “As a company, we measure and review our businesses through different lenses. One such lens is how each of our various businesses can help each other grow. Within Devices & Services, we’re focused on the value we create when customers use our services, not just when they buy our devices. Our Devices & Services organization has established numerous profitable businesses for Amazon and is well-positioned to continue doing so going forward. Hundreds of millions of Amazon devices are used by customers around the world, and to us, there is no greater measure of success. We will never stop pursuing bold ideas—from self-driving taxis with Zoox, low-earth orbit satellites with Kuiper, and the world’s most useful personal AI with Alexa—that have the potential to make our customers’ lives better. We plan to continue pursuing these businesses with the same inventiveness and customer focus that we always have.”
