Amazon is known to have sold Echo speakers for cheap or at a loss in the hopes of making money off Alexa later. In 2019, then-Amazon Devices SVP Dave Limp, who exited the company last year, told WSJ: "We don’t have to make money when we sell you the device." WSJ noted that this strategy has applied to other unspecified Amazon devices, too.
People tend to use Alexa for free services, though, like checking the weather or the time, not making big purchases.
"We worried we’ve hired 10,000 people and we’ve built a smart timer,” a former senior employee told the WSJ.
Amazon is now banking on the impending release of a subscription-based gen AI Alexa to finally drive profits. The idea is that people will be willing to pay a recurring fee to use Alexa if it can do more advanced things, like perform multiple commands without the user having to say "Alexa" repeatedly, be more conversational, and manage smart homes more intuitively. Amazon is considering charging $5 to $10 per month for generative AI Alexa, Reuters reported in June.
We live in such a bizarre time. A Bezos-like character couldn't have been a villain in an episode of the "Twilight Zone". Even the reality of that show - audiences of that era would have thought the character utterly ridiculous and the situation cartoony. How could an evil man even in the far off future of 2024 amass ~$2 billion (adjusted for inflation), have worker-serfs, spy on 10,000,000s of Americans, have a $50m toy - his yacht, etc.