It’s been more than a decade since Jeff Bezos excitedly sketched out his vision for Alexa on a whiteboard at Amazon headquarters. Its voice assistant would help to do all sorts of tasks like shopping online, controlling gadgets or even reading a bedtime story to kids.
But the great vision of the Amazon founder of a new voice-controlled computer platform is not enough. As tech world hype feverishly turns to generative AI as the “next big thing,” this moment has prompted many to ask tough questions about the previous “next big thing” — Amazon’s much-vaunted voice assistants, Google, Apple, Microsoft and others.
A “grow grow grow” culture described by a former Amazon Alexa marketing executive has now shifted to a more intense focus on how the device can help the e-commerce giant make money.
“If you can do anything that you can potentially monetize directly, you should do it,” was the recent dictation from Amazon executives, according to a current Alexa team member.
Under the tenure of new CEO Andy Jassy, this shift in focus has led to significant layoffs on Amazon’s Alexa team late last year as executives examine the product’s direct contribution to the company’s bottom line.
The tightening came amid wider cuts that saw the e-commerce giant shed 18,000 jobs across the group as it faced pressure to improve profits amid a global tech downturn.
Microsoft, whose CEO Satya Nadella declared in 2016 that “bots are the new apps,” now admits that voice assistants, including its own Cortana, haven’t lived up to the hype.
“They were all dumb as a rock,” Nadella told the Financial Times last month. “It doesn’t matter whether it’s Cortana or Alexa or Google Assistant or Siri, none of these just work. We had a product that would be the new front end for many [information] that did not work.”
Nadella can afford to be blunt: Microsoft’s recent introduction of the AI chatbot ChatGPT to its Bing search engine means the company is now seen as a leader in the space, having previously been largely forgotten by the majority of netizens.
ChatGPT’s ability to understand complex instructions made existing voice assistants look comparatively stupid, said Adam Cheyer, the co-creator of Siri, the voice assistant acquired by Apple in 2010 and introduced to the iPhone a year later.
“The previous options were just too cumbersome,” he said. “No one knows what they can or cannot do. They don’t know what to say or not to say.”
Efforts to highlight additional features by having Alexa blurt out “did you know” information at sometimes inopportune times has only served to frustrate users.
“Our patience is limited, people get angry,” says Carolina Milanesi, president of market research group Creative Strategies. “This isn’t the job you asked ‘her’ for. ‘She’ stretched too far.”
For many users, Alexa is seen as just a “glorified clock radio,” noted independent tech analyst Benedict Evans.
Amazon said it’s fully committed to Alexa and “as upbeat as ever.”
“The fact is that Alexa continues to grow. Engagement grew more than 30 percent globally in 2022, with more than 50 percent of Alexa customers now using it to shop,” Amazon said.
In many ways, Alexa can be seen as an extraordinary achievement for Amazon. It is by far the market leader in the US, with an estimated 66 percent of the market, according to Insider Intelligence. Eight years after its soft launch in early 2014, calling “Alexa” now triggers a robotic response in the homes of about 20 percent of the US population, the group estimates.
According to Amazon, third-party manufacturers have developed more than 140,000 products compatible with Alexa, and the operating system controls more than 300 million smart devices such as light bulbs or cameras. Research group IDC estimates that more than half of Alexa owners interact with the device at least once a day, a better hit rate than both Apple Siri and Google Assistant.
But the direct value of these interactions to Amazon seemed small, and there was internal disagreement over how to measure or credit Alexa’s impact on spending on Amazon.com, said two people familiar with Alexa’s strategy.
The current sentiment is in stark contrast to when the excitement for Amazon’s Alexa originated with Bezos, who directly led Alexa’s testing and development, even going so far as to personalize the look and language of marketing materials.
“Our goal wasn’t to make the Alexa program profitable,” said Amazon’s former head of marketing. “It was supposed to sell devices – and we sold tons of devices.”
After Amazon missed out on the smartphone boom, Amazon had hopes that Alexa would open up a vast new ecosystem of new, and ideally lucrative, voice-controlled apps. Amazon called these apps “Skills” and opened up Alexa to third-party developers.
The company announced in November that there are now more than 130,000 skills in Amazon’s store. Google took a similar step with its assistant, calling them “conversation actions.”
But Skills on Alexa are mostly offered for free, with developers saying monetization is nearly impossible, while “discovery” — the process by which users find new apps to try — is difficult.
“I think there’s still a lot of people who don’t even know what a ‘skill’ is,” said Brian Tarbox of Wabi Sabi Software, which develops Alexa Skills. “I don’t know if they did a great job of saying, ‘Hey, here’s all these other things Alexa can do’.”
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Google has seen similar challenges. In June, it will end access for third-party “talk actions” designed specifically for its voice assistant, and instead instruct them to add voice capabilities to its Android smartphone and tablet apps.
Without a smartphone, Amazon wouldn’t have a similar retreat, IDC analyst Adam Wright said, noting that the continued competitive threat posed by Apple and Android “could erode profits made from sales of smart speakers.”
But a revival of voice assistants could come from generative AI, which could help make them much smarter than they are today.
“It causes a stir,” says the current Amazon employee about tools like ChatGPT. “There was a directive that came from some [executives] Getting teams to brainstorm what it would look like if Alexa were smarter.”
The technology has the potential to put voice assistants back on track of their original sci-fi goal, Siri co-creator Cheyer added.
“I think it’s about quality,” he said. “Basically, this technology will allow for breadth, flexibility and complexity not seen in the previous generation of voice assistants. I believe there will be a renaissance.”
