Why Amazon’s Alexa and Echo Devices Might Not Be Profitable? Here are Some Reasons

Amazon’s Alexa and Echo devices are among the most popular smart home gadgets people use nowadays.  

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This picture taken on on October 22, 2019, shows a new Amazon warehouse, part of mobile robotic fulfilment systems also known as ‘Amazon robotics’, in Bretigny-sur-Orge, some 30kms south of Paris. (Photo by Philippe LOPEZ / AFP)

But do you know there’s a report that when it comes to generating revenues, analysts find these smart speakers and other similar Amazon devices are not contributing sales to the company? 

As of press time, the giant e-commerce is not in a good financial situation. 

Previously, Amazon announced, via a memo, that it is terminating some employees in the Devices and Books businesses. 

Amazon Alexa, Echo Devices Affect Business Growth

According to Fast Company’s latest report, Amazon’s efforts to develop and manufacture smart home devices are successful. 

Why Amazon's Alexa, Echo Devices Negatively Affects Business Growth; Here are Their Problems

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The updated Echo Dot, is displayed in Amazon’s Day 1 building in Seattle on September 20, 2018. – Amazon weaves its Alexa digital assistant into more services and devices as it unveiles new products powered by artificial intelligence including a smart microwave and dash-mounted car gadget. (Photo by Grant HINDSLEY / AFP)

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CIRP (Consumer Intelligence Research Partners) recently found that Amazon dominates the smart speaker market. 

The marker research firm added that around half of Amazon Echo consumers own more than one of these smart home speakers. 

But, Amazon is not only focusing on the Echo speakers. There are other smart home devices, such as Alexa. 

This wide array of smart home products gets really expensive to manufacture, design, and market. 

Aside from this, enthusiasts also explained that Amazon still hasn’t achieved its main goals for Alexa and other similar gadgets. 

“We kept waiting, waiting, waiting for a huge percentage of consumers to say, ‘I bought a pizza’ [on my Echo],” explained CIRP co-founder Michael Levin. 

Another issue with smart home speakers is that they are usually R&D (research and development) products. One of these R&D innovations is the Amazon Glow. 

This video-calling device didn’t last long in the market, with Amazon pulling it out just one year after the launch.   

Amazon’s Mass Layoffs

Business Standard reported that the e-commerce giant will start laying off employees as early as 2023. 

Amazon’s CEO Andy Jassy announced this decision in his recent memo sent to staff. 

The retailer is expected to terminate around 10,000 employees in 2023. But, Jassy didn’t confirm the total numbers of employees that will be terminated. 

You can click here to learn more about Amazon’s upcoming mass layoffs. 

In other stories, Amazon’s recruitment plans were halted. 

Recently, we reported that Amazon’s market value declined by $1.88 trillion due to worsening inflation. 

For more news updates about Amazon and other e-commerce giants, keep your tabs open here at TechTimes.  

Related Article: Amazon Discontinues Food-Delivery Business in India, Two Years After Its Launch

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Written by Griffin Davis

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