Amazon’s big dreams for Alexa fall short

It has been more than a decade since Jeff Bezos excitedly sketched out his vision for Alexa on a whiteboard at Amazon’s headquarters. His voice assistant would help do all manner of tasks, such as shop online, control gadgets, or even read kids a bedtime story.

But the Amazon founder’s grand vision of a new computing platform controlled by voice has fallen short. As hype in the tech world turns feverishly to generative AI as the “next big thing”, the moment has caused many to ask hard questions of the previous “next big thing” — the much-lauded voice assistants from Amazon, Google, Apple, Microsoft and others.

A “grow grow grow” culture described by one former Amazon Alexa marketing executive has now shifted to a more intense focus on how the device can help the ecommerce giant make money.

“If you have anything you can do that you might be able to directly monetise, you should do it,” was the recent diktat from Amazon leaders, according to one current employee on the Alexa team.

Under new chief executive Andy Jassy’s tenure this change of focus has resulted in significant lay-offs in Amazon’s Alexa team late last year as executives scrutinise the product’s direct contribution to the company’s bottom line.

The belt-tightening came as part of broader cuts that have seen the ecommerce giant slash 18,000 jobs across the group amid pressure to improve profits during a global tech downturn.

At Microsoft, whose chief executive Satya Nadella declared in 2016 that “bots are the new apps”, it is now acknowledged that voice assistants, including its own Cortana, did not live up to the hype.

“They were all dumb as a rock,” Nadella told the Financial Times last month. “Whether it’s Cortana or Alexa or Google Assistant or Siri, all these just don’t work. We had a product that was supposed to be the new front-end to a lot of [information] that didn’t work.”

Nadella can afford to be blunt: Microsoft’s recent introduction of AI chatbot ChatGPT to its Bing search engine means the company is now seen as a leader in the field, having previously been mostly forgotten by the majority of internet users.

ChatGPT’s ability to understand complex instructions left existing voice assistants looking 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 capabilities have just been too awkward,” he said. “No one knows what they can do or can’t do. They don’t know what they can say or can’t say.”

Efforts to highlight additional functionality, by having Alexa blurt out “did you know” information at sometimes-inopportune times, has only served to frustrate users.

“Our patience is limited, you get annoyed,” says Carolina Milanesi, president of market research group Creative Strategies. “That’s not the job that you asked ‘her’ to do. ‘She’ was overstepping.”

For many users, Alexa is just viewed as a “glorified clock radio”, noted independent tech analyst Benedict Evans.

Amazon said it was fully committed to Alexa and “as optimistic as ever”.

“The fact is Alexa continues to grow. Engagement increased more than 30 per cent globally in 2022, more than 50 per cent of Alexa customers are now using it to shop,” said Amazon.

By many measures, Alexa can be considered an extraordinary success for Amazon. It is by far and away the leader in the US with an estimated 66 per cent of the market, according to Insider Intelligence. Eight years after its soft-launch in early 2014, calling out “Alexa” now elicits a robotic response in the homes of about 20 per cent of the US population, the group estimates.

Third-party manufacturers have created more than 140,000 products that are compatible with Alexa, and its operating system controls more than 300mn smart devices, such as lightbulbs or cameras, according to Amazon. Research group IDC estimates that more than half of Alexa owners interact with the device at least once per day, a better hit rate than both Apple Siri and Google Assistant.

But the direct value of those interactions to Amazon appeared low, and there had been disagreements internally on how to measure or credit Alexa’s impact on spending on Amazon.com, said two people familiar with Alexa’s strategy.

The current mood is in stark contrast to the time when enthusiasm for Amazon’s Alexa flowed eagerly from Bezos, who took a direct hand in guiding Alexa’s testing and development, even going so far as to personally craft the look and language of marketing materials.

“Our goal was not to make the Alexa program profitable,” said the former Amazon marketing executive. “It was to sell devices — and we were selling tons of devices.”

Having missed out on the smartphone boom, the hope at Amazon had been that Alexa would open up a vast new ecosystem of new and ideally lucrative apps powered by voice. Amazon named these apps “Skills”, and opened up Alexa to third party developers.

There were now more than 130,000 Skills in Amazon’s store, the company said in November. Google made a similar move with its assistant, calling them “conversational actions”.

But Skills on Alexa are largely offered free of charge, with developers saying monetisation is near-impossible, while “discovery” — the process by which users find new apps to try — is hard.

“I think there’s still a ton of people who don’t even know what a ‘Skill’ is,” said Brian Tarbox from Wabi Sabi Software, which develops Alexa Skills. “I don’t know that they’ve done a great job in saying: ‘Hey, here are all these other things that Alexa can do’.”

Google has seen similar challenges. In June it will end access for the third-party “conversational actions” made specifically for its voice assistant, instead directing them to add voice functionality to its Android smartphone and tablet apps.

Without a smartphone, Amazon had no similar fall back, said IDC analyst Adam Wright, noting that the continued competitive threat of Apple and Android “could erode gains made via the smart speaker” sales.

But a voice assistant revival may come from generative AI, which could help make them much smarter than they are today.

“It’s causing buzz,” said the current Amazon employee about tools such as ChatGPT. “There was a directive that came down from some [executives] to have teams brainstorm what it would look like for Alexa to be more intelligent.”

The technology had the potential to bring voice assistants back on the track towards the original sci-fi goal, Siri co-creator Cheyer added.

“I do think it is about quality,” he said. “Fundamentally, this technology will enable that breadth and flexibility and complexity that has not existed with the previous generation of voice assistants. I think there will be a renaissance.”