The other big story of the long weekend, which I have to note for my predictions, is about Amazon. Specifically, Alexa.
During the first quarter of this year, Amazon’s “Worldwide Digital” unit, which includes everything from the Echo smart speakers and Alexa voice technology to the Prime Video streaming service, had an operating loss of over $3 billion, according to internal data obtained by Insider.
The vast majority of Worldwide Digital’s losses were tied to Amazon’s Alexa and other devices, a person familiar with the division told Insider. The loss was by far the largest among all of Amazon’s business units and slightly double the losses from its still nascent physical stores and grocery business.
While Amazon’s business model has traditionally tolerated this kind of poor financial performance from its hardware businesses, that’s no longer true. According to press reports and an internal email seen by Insider, Amazon’s Alexa and the devices team at large is now the prime target of the biggest layoffs in the company’s history.
I’ve been very bullish on voice. I’m convinced it’s the UI of the future. Alexa is not a UI – it’s a platform.
I’m including a link to a Stacey on IoT piece about voice in general, and her thinking matches mine. Voice itself is a UI and not a platform, of which digital assistants are a platform.
Quoting Stacey:
So as we look at Amazon’s Alexa layoffs, I don’t think it reflects a bet against voice or a bet against the smart home. It’s an indication that we need to separate voice as a user interface from digital assistants and figure out how to give digital assistants the context they need to become something people will pay for.
Finding ways to monetize platforms is the trick. Don’t lump voice as a UI in with the platform nor digital assistant. And so, I’m still bullish on voice as a UI.