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“Failed” as in failed to be a profitable business model. I’ve got 3 Echo Dots and use them everyday. They do have limited use but people still buy them. For $1

“Failed” as in failed to be a profitable business model. I’ve got 3 Echo Dots and use them everyday. They do have limited use but people still buy them. For $15 USD, it’s a no brainer purchase. As language models improve the device will become more useful but there’s no point in waiting.

jqpabc123 4y ago
For $15 USD, it’s a no brainer purchase. It turns out that Amazon is subsidizing these things and is on track to lose $10 billion on them this year alone. The price of everything on Amazon is higher because of these cheap toys. no point in waiting No point in buying if they aren't sustainable.
- melling 4y ago
  Why don’t you give that a little more thought. They aren’t losing $10 billion on hardware on a $15 device.
  - jqpabc123 4y ago
    The hardware obviously isn't the only cost. The stats I've seen say they sold roughly 80 million of these this year. To be sustainable, this $15 device would have to cost in the neighborhood of $115 each. If they can't sell them for at least a break even price, they are likely to do what Microsoft did and shut the whole thing down --- and leave you with a cheap brick. Their initial plan and motivation was flawed. They were expecting consumers to use these things to just blindly order stuff from Amazon --- at a price most advantageous to Amazon of course. Consumers may be pretty stupid but it turns out they aren't *that* stupid --- enough to blindly make purchases just for the thrill of doing it with their voice. Very few are using them for this. Why don’t you give that a little more thought. Is this enough thinking for you?
    - Tagbert 4y ago
      While I agree that the Alexa devices would cost more if they were a normal product, $115 is too high. The Apple HomePod Mini sells for $99 and Apple is known to maintain a higher margin (average 35%) on their products than most other manufacturers. Assuming a similar cost for the Alexa (likely cheaper as the HomePod is a better speaker) and a lower margin puts the most likely retail price for an Alexa at around $70-75.
      - jqpabc123 4y ago
        My $115 was a break even priced based on their units sold and reported losses in their Alexa unit for this year. Adjustments can undoubtedly be made to bring this more inline with what the market will bear but it will almost certainly have to be much higher than $15 to break even.
- s1artibartfast 4y ago
  >No point in buying if they aren't sustainable. Why would consumers care if they are sustainable? If I get my value out of the product before it is bricked, I don't care if the company lost billions or even trillions of dollars?
  - jqpabc123 4y ago
    Why would consumers care if they are sustainable? Most don't --- it's typically out of sight, out of mind. Most consumers don't care that credit cards consume 2.5% of the purchase price. But they ultimately pay for it. Likewise with Amazon, their projected $10 billion loss on Alexa toys this year alone affects the price of everything else you buy from them. If I get my value out of the product before it is bricked And if you don't? It takes time, effort and money to fully incorporate Alexa into your home. The speaker is only the first part of the cost. Personally, I'm reluctant to do this if I know the product is a marketplace loser on the verge of being axed. https://news.ycombinator.com/item?id=33757288 https://news.ycombinator.com/item?id=33757288
    - s1artibartfast 4y ago
      I'm not sure I agree that losses on Alexa translate to higher prices, opposed to just cutting into profits. Most profitable businesses set prices too optimize unit profit times sales. That is to say, they they won't increase prices if sales will go down as a result. They aren't running a non-profit
      - jqpabc123 4y ago
        They aren't running a non-profit. Precisely the point. $10 billion is a decent hit to the bottom line. They can choose to try and absorb it, but it typically rolls down to the consumer somehow. If not, I can see a dead simple way to add $10 billion to profit --- shut down Alexa. Neither of these options inspires a lot of confidence in the future of the product.
        s1artibartfast 4y ago

jqpabc123 4y ago

For $15 USD, it’s a no brainer purchase. It turns out that Amazon is subsidizing these things and is on track to lose $10 billion on them this year alone. The price of everything on Amazon is higher because of these cheap toys. no point in waiting No point in buying if they aren't sustainable.

melling 4y ago
Why don’t you give that a little more thought. They aren’t losing $10 billion on hardware on a $15 device.
- jqpabc123 4y ago
  The hardware obviously isn't the only cost. The stats I've seen say they sold roughly 80 million of these this year. To be sustainable, this $15 device would have to cost in the neighborhood of $115 each. If they can't sell them for at least a break even price, they are likely to do what Microsoft did and shut the whole thing down --- and leave you with a cheap brick. Their initial plan and motivation was flawed. They were expecting consumers to use these things to just blindly order stuff from Amazon --- at a price most advantageous to Amazon of course. Consumers may be pretty stupid but it turns out they aren't *that* stupid --- enough to blindly make purchases just for the thrill of doing it with their voice. Very few are using them for this. Why don’t you give that a little more thought. Is this enough thinking for you?
  - Tagbert 4y ago
    While I agree that the Alexa devices would cost more if they were a normal product, $115 is too high. The Apple HomePod Mini sells for $99 and Apple is known to maintain a higher margin (average 35%) on their products than most other manufacturers. Assuming a similar cost for the Alexa (likely cheaper as the HomePod is a better speaker) and a lower margin puts the most likely retail price for an Alexa at around $70-75.
    - jqpabc123 4y ago
      My $115 was a break even priced based on their units sold and reported losses in their Alexa unit for this year. Adjustments can undoubtedly be made to bring this more inline with what the market will bear but it will almost certainly have to be much higher than $15 to break even.
s1artibartfast 4y ago
>No point in buying if they aren't sustainable. Why would consumers care if they are sustainable? If I get my value out of the product before it is bricked, I don't care if the company lost billions or even trillions of dollars?
- jqpabc123 4y ago
  Why would consumers care if they are sustainable? Most don't --- it's typically out of sight, out of mind. Most consumers don't care that credit cards consume 2.5% of the purchase price. But they ultimately pay for it. Likewise with Amazon, their projected $10 billion loss on Alexa toys this year alone affects the price of everything else you buy from them. If I get my value out of the product before it is bricked And if you don't? It takes time, effort and money to fully incorporate Alexa into your home. The speaker is only the first part of the cost. Personally, I'm reluctant to do this if I know the product is a marketplace loser on the verge of being axed. https://news.ycombinator.com/item?id=33757288 https://news.ycombinator.com/item?id=33757288
  - s1artibartfast 4y ago
    I'm not sure I agree that losses on Alexa translate to higher prices, opposed to just cutting into profits. Most profitable businesses set prices too optimize unit profit times sales. That is to say, they they won't increase prices if sales will go down as a result. They aren't running a non-profit
    - jqpabc123 4y ago
      They aren't running a non-profit. Precisely the point. $10 billion is a decent hit to the bottom line. They can choose to try and absorb it, but it typically rolls down to the consumer somehow. If not, I can see a dead simple way to add $10 billion to profit --- shut down Alexa. Neither of these options inspires a lot of confidence in the future of the product.
      - s1artibartfast 4y ago