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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.