- Amazon is reportedly shelling out billions to combat waning interest and use of Alexa devices.
- In some years, up to 25% of new Alexa owners were no longer active in the 2nd week, per Bloomberg.
- Citing internal documents, Bloomberg said Amazon aims for Alexa to identify the rooms from which users are speaking.
Amazon is struggling to keep people using its Alexa devices after the buyer’s initial excitement wears off, according to Bloomberg.
Internal data showed that in some years, 15% to 25% of new users were no longer active with their Alexa devices in their second week since buying them, Bloomberg reported. Amazon told Insider the vast majority of Alexa users are still active a month after registering their devices and beyond.
New Alexa users find half of the features they’ll ever use on the devices in the first three hours from activating them, according to a planning document for 2019 that Bloomberg cited. Amazon told Insider this finding is based on research from 2016, and is no longer accurate.
“The assertion that Alexa growth is slowing is not accurate,” Amazon spokesperson Kinley Pearsall told Insider in a statement.” The fact is that Alexa continues to grow — we see increases in customer usage, and Alexa is used in more households around the world than ever before. Tens of millions of customers use Alexa every day, and we are as optimistic about Alexa’s future today as we have ever been.”
The company is throwing plenty of money and manpower at the problem, Bloomberg reports, citing documents that show projections of $4.2 billion in fixed costs for this year and noting that Amazon has more than 10,000 people working on Alexa.
Amazon told Insider it does not break out such data.
In 2018, the company projected losing $5 per device this year but hoped to break into profits of $2 per device in 2028, though an internal market analysis conducted last year concluded Amazon “passed its growth phase” with smart speakers, according to Bloomberg.
Documents also laid out plans to outfit Alexa devices with more cameras and sensors so they could recognize different people’s voices and figure out which room a user is in while speaking, Bloomberg reports. Amazon told Insider this isn’t new, pointing to optional features like ultrasound motion detection, visual ID, and Alexa Guard, which notifies users about sounds like smoke alarms and breaking glass.