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2020 - It took Amazon four years to populate the world with 100 million Alexa-powered devices. It took the company just one more year to more than double that n

by achow 4y ago

2020 - It took Amazon four years to populate the world with 100 million Alexa-powered devices. It took the company just one more year to more than double that number. The e-commerce titan announced Monday that there are now "hundreds of millions of Alexa-enabled devices" in customers' hands worldwide, a massive increase from the 100 million it announced last January. https://www.cnet.com/home/smart-home/amazon-sees-alexa-devices-more-than-double-in-just-one-year/ https://www.cnet.com/home/smart-home/amazon-sees-alexa-devic... Annual sales ~100 million device, then losing $50/device would lead to a figure of $5 billion loss in a year. Loss of $50/device would include cost for running R&D, running factories, giving minimum guarantee to factories, and all other associated cost - marketing, customer acquisition, support etc.. So $10B loss in a year sounds in the realm of possibility.

piva00 4y ago
Alexa-powered does not necessarily mean Alexa devices made by Amazon though. For example: I own a multiroom speaker setup not made by Amazon that is Alexa-enabled, all speakers could run Alexa if I had set them up for it (which I won't, ever), and they're very likely counted on this metric. I can remember a multitude of other speakers and devices with an Alexa-enabled badge on their packaging that aren't made by Amazon. It'd be good to have hardware figures for sales of Amazon's own devices.
- achow 4y ago
  Good point. However, supporting all the 'partner devices' comes with associated cost in terms of engg' development and support (somewhat like what Android must be dealing with. Android division in Google would not be a low cost division I'm sure).
  - piva00 4y ago
    It surely does, I work at a place where we also have to deal with multiple partner integrations across multiple vendors and types of devices for our products, there's some overhead for it but not nearly as much as one would expect.
    - achow 4y ago
      One would not be able to imagine when things operate at mega scale (FAANG level), with world conquering ambitions at Exec level, and particularly in consumer domain. I was at MS when Windows was a 'thing'. Windows was purely about software, the complexity and support requirements scales in logarithmic scale as more and more OEMs gets involved with their unique hardware, business constraints and cultures.
      - piva00 4y ago
        I work for a pretty sizeable corporation, a household name you have heard of or use products from. I don't want to dox myself too much but I can say we are not MS level of support of OEMs (because that's a quite ridiculous bar to cross, haha) but still we do have quite a few integrations across multiple consumer device types.
- ben174 4y ago
  Assuming you're referring to Sonos -- while they were once the best, they seem to just not work well anymore. I'm lucky if I can get it to function correctly. I've observed my brother's Chromecast whole-home audio which cost him a fraction of the price and has a ton more variety - and I'm thinking I may ditch my Sonos setup.
  - withinboredom 4y ago
    Building your own is also ridiculously simple and as cheap or expensive as you’re willing to spend on speakers and/or drivers.
  - piva00 4y ago
    My setup is from Audio Pro, a Swedish brand. Never really thought Sonos were good value for the price and sound quality to be honest... Not an audiophile but I always look for the best bang for the buck I'm spending on audio.
  - ericmay 4y ago
    Strange. I recently purchased some Sonos products and haven’t had any issues whatsoever. They’ve been absolutely fantastic for me. What issues are you experiencing? Wonder if it’s something I can keep a look out for.
  - canes123456 4y ago
    My Sonos speakers has been kind of buggy but I also have a brand new google home and it is not any better. I am thinking the blame is on google assistant. Google assistant seems to do a much better job understanding me but is inconsistent with nearly identical input. Alexa seems to be worse but is at least consistent.
  - seanmcdirmid 4y ago
    I switched my Sonos speaker over from Alexa to Google and it’s working well enough now.
consp 4y ago
Nice numbers but don't those Alexa enabled device bring in revenue offsetting the cost and limiting the loss? Or doesn't anyone have an Amazon premium account or buy anything with Alexa on Amazon?
- badlucklottery 4y ago
  You'd really want to show that people bought more stuff due to Alexa than they would have otherwise. Tapping out an order on a smart phone is already pretty damn convenient so that's actually a high bar to clear.
- mcphage 4y ago
  We have I think… 5? Echo devices in my house, including an echo dot Amazon just sold me for $1 because it was my “Primeaversary". I haven’t purchased a single thing through them.
  - luckylion 4y ago
    "Hey Alexa, I need a new pan, mine is old and broken" - "I have the Pan Frying Pan Cooking Pan Cooking Children Family Happy Best Pan from Fhrgwdsst for $14.99, would you like me to order it for you?"
    - mcphage 4y ago
      I think my favorite notification was a few months ago—my echo speaker turned yellow because there was a notification. My kids find this incredibly exciting, and told Alexa to play it. And then Alexa announced to us, in breathless terms, that bananas are a good source of potassium. It even said "this is B A N A N A S", as only a robot can.
      - luckylion 4y ago
        Humor probably helps a lot with making people feel better around these devices. Are you using it for anything non-trivial?
c7b 4y ago
The article says that the hardware was generally sold at cost, though.
- rahoulb 4y ago
  Doesn't that mean cost of materials/COGS though? Which doesn't include the overheads (engineering and staff, development and maintenance of back-end services, legal and compliance and all the rest) that you would normally plan to cover with the gross profit on the device.
  - c7b 4y ago
    It's a good question what exactly they meant by 'at cost', but it's at least going to be the plain hardware cost (plus maybe shipping), I suppose. And the point of the parent and GP was that the overheads shouldn't be that significant either, so it is still a bit of a mystery where exactly they spent that much money.
- tinus_hn 4y ago
  Even if the hardware is sold at cost, you still have to pay for running the service.
8n4vidtmkvmk 4y ago
article said sell "at cost" not "at a loss"

by achow 4y ago

piva00 4y ago

Alexa-powered does not necessarily mean Alexa devices made by Amazon though. For example: I own a multiroom speaker setup not made by Amazon that is Alexa-enabled, all speakers could run Alexa if I had set them up for it (which I won't, ever), and they're very likely counted on this metric. I can remember a multitude of other speakers and devices with an Alexa-enabled badge on their packaging that aren't made by Amazon. It'd be good to have hardware figures for sales of Amazon's own devices.

achow 4y ago
Good point. However, supporting all the 'partner devices' comes with associated cost in terms of engg' development and support (somewhat like what Android must be dealing with. Android division in Google would not be a low cost division I'm sure).
- piva00 4y ago
  It surely does, I work at a place where we also have to deal with multiple partner integrations across multiple vendors and types of devices for our products, there's some overhead for it but not nearly as much as one would expect.
  - achow 4y ago
    One would not be able to imagine when things operate at mega scale (FAANG level), with world conquering ambitions at Exec level, and particularly in consumer domain. I was at MS when Windows was a 'thing'. Windows was purely about software, the complexity and support requirements scales in logarithmic scale as more and more OEMs gets involved with their unique hardware, business constraints and cultures.
    - piva00 4y ago
      I work for a pretty sizeable corporation, a household name you have heard of or use products from. I don't want to dox myself too much but I can say we are not MS level of support of OEMs (because that's a quite ridiculous bar to cross, haha) but still we do have quite a few integrations across multiple consumer device types.
ben174 4y ago
Assuming you're referring to Sonos -- while they were once the best, they seem to just not work well anymore. I'm lucky if I can get it to function correctly. I've observed my brother's Chromecast whole-home audio which cost him a fraction of the price and has a ton more variety - and I'm thinking I may ditch my Sonos setup.
- withinboredom 4y ago
  Building your own is also ridiculously simple and as cheap or expensive as you’re willing to spend on speakers and/or drivers.
- piva00 4y ago
  My setup is from Audio Pro, a Swedish brand. Never really thought Sonos were good value for the price and sound quality to be honest... Not an audiophile but I always look for the best bang for the buck I'm spending on audio.
- ericmay 4y ago
  Strange. I recently purchased some Sonos products and haven’t had any issues whatsoever. They’ve been absolutely fantastic for me. What issues are you experiencing? Wonder if it’s something I can keep a look out for.
- canes123456 4y ago
  My Sonos speakers has been kind of buggy but I also have a brand new google home and it is not any better. I am thinking the blame is on google assistant. Google assistant seems to do a much better job understanding me but is inconsistent with nearly identical input. Alexa seems to be worse but is at least consistent.
- seanmcdirmid 4y ago
  I switched my Sonos speaker over from Alexa to Google and it’s working well enough now.

consp 4y ago

Nice numbers but don't those Alexa enabled device bring in revenue offsetting the cost and limiting the loss? Or doesn't anyone have an Amazon premium account or buy anything with Alexa on Amazon?

badlucklottery 4y ago
You'd really want to show that people bought more stuff due to Alexa than they would have otherwise. Tapping out an order on a smart phone is already pretty damn convenient so that's actually a high bar to clear.
mcphage 4y ago
We have I think… 5? Echo devices in my house, including an echo dot Amazon just sold me for $1 because it was my “Primeaversary". I haven’t purchased a single thing through them.
- luckylion 4y ago
  "Hey Alexa, I need a new pan, mine is old and broken" - "I have the Pan Frying Pan Cooking Pan Cooking Children Family Happy Best Pan from Fhrgwdsst for $14.99, would you like me to order it for you?"
  - mcphage 4y ago
    I think my favorite notification was a few months ago—my echo speaker turned yellow because there was a notification. My kids find this incredibly exciting, and told Alexa to play it. And then Alexa announced to us, in breathless terms, that bananas are a good source of potassium. It even said "this is B A N A N A S", as only a robot can.
    - luckylion 4y ago
      Humor probably helps a lot with making people feel better around these devices. Are you using it for anything non-trivial?

c7b 4y ago

The article says that the hardware was generally sold at cost, though.

rahoulb 4y ago
Doesn't that mean cost of materials/COGS though? Which doesn't include the overheads (engineering and staff, development and maintenance of back-end services, legal and compliance and all the rest) that you would normally plan to cover with the gross profit on the device.
- c7b 4y ago
  It's a good question what exactly they meant by 'at cost', but it's at least going to be the plain hardware cost (plus maybe shipping), I suppose. And the point of the parent and GP was that the overheads shouldn't be that significant either, so it is still a bit of a mystery where exactly they spent that much money.
tinus_hn 4y ago
Even if the hardware is sold at cost, you still have to pay for running the service.

8n4vidtmkvmk 4y ago

article said sell "at cost" not "at a loss"