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On Wednesday, according to Bloomberg, Amazon's internal analysis of its intelligent voice service Alexa business showed that the recent profit of the business was low, the user churn rate was high, and the growth rate of the intelligent voice market in the next few years was only 1.2%.
In every holiday sales season since 2015, Amazon has pinned its sights on selling products like smart speakers from smart voice service Alexa. Still, according to Amazon's internal data, over the years, 15 to 25 percent of new Alexa users have only sustained interest in such products in the first week.
First, both worry and confidence, is expected to grow by 1.2% per year in the future
Bloomberg reviewed Amazon's internal planning documents, which repeatedly raised concerns about retaining users and increasing engagement. The documents, which cover 2018 to 2021, also detail Amazon's confidence in Alexa's products, including plans to add more cameras and sensors that will enable devices to recognize different sounds and determine where users are in rooms during each interaction with a voice assistant.
▲ The settings button on amazon smart speaker Echo devices
Last year, Amazon's internal analysis of the smart voice service market confirmed that the market has "passed the growth phase" and expects annual growth rates of just 1.2 percent in the coming years.
But Amazon believes that many of the metrics cited in this internal document are outdated or inaccurate, and Alexa's market is now not limited to smart speakers. In an emailed statement, Amazon spokesman Kinley Pearsall said the company was as optimistic about Alexa as ever. "The claim that Alexa's growth is slowing is not accurate." She wrote, "The truth is that Alexa's market continues to grow, we're seeing an increase in customer usage, and Alexa is being used in more households around the world than ever before." ”
Second, speakers, alarm clocks, lights, what else can voice assistants do?
Bloomberg said Amazon believes that one of the main obstacles to the development of the smart voice assistant market is privacy concerns, because Amazon employees review the audio clips received by smart voice assistants to help improve its software and some notable bugs. In 2019, Bloomberg quoted people familiar with the matter as saying that Amazon employs employees as data assistants for its intelligent voice assistants, and that some of the voices recognized by these employees are private conversations of users.
Another obstacle is more fundamental: people will feel that Alexa is not practical. For years, most Alexa users used only voice devices to play music, or set a timer while cooking, or turn on the lights. In a 2019 planning document, Amazon employees noted that new Alexa users will find that within three hours of activating their devices, they are using only half the full functionality.
▲ Smart speaker Echo Dot's alarm clock function
"Are they overvalued in the short term? Of course. Greg Gottesman, managing director and co-founder of pioneer square Labs, a startup studio and investment firm, said. Still, he's bullish on Alexa and the voice technology boom it pioneered. As with most techniques, he said, "it takes time to pickle." We still have to wait. Five years from now, ten years from now, people will be using Alexa for much more than three purposes. ”
Third, the loss of $5 to the profit of $2, the new function is slowly advancing
Amazon's intelligent voice service Alexa business landed the first device, the cylindrical Echo smart speaker, which has been a great success. Amazon identified last year that 25 percent of U.S. households own at least one Alexa device each, according to internal documents; that's 27 percent of households with Prime members launched by Amazon.
▲ Cylindrical Amazon Echo smart speaker
Amazon employs more than 10,000 people to develop intelligent voice services, and internal documents show that its fixed costs are expected to reach $4.2 billion in 2021. For such a costly sector, Alexa's revenue-generating prospects are unclear.
In 2018, Amazon expects a loss of $5 per device in 2021 and has said it hopes to raise it to a profit of $2 per unit in 2028. Amazon says it wants users to access other Amazon services through Alexa and make a profit from it.
Amazon is focused on developing new ways for users to interact with Alexa, such as home devices with screens, Alexa-enabled headsets, and car apps. Amazon will also continue to improve the way it already has Alexa interacts with customers.
Earlier, Amazon released a document in 2019 saying that despite the company's efforts to add features to Alexa, user engagement has not increased overall.
Amazon has also been using Alexa itself to push consumers to use the system in new ways. In recent years, in the process of satisfying any function that people actually demand, these devices have begun to proactively ask for new requirements that people can make. But some users have been working hard to turn off the feature.
For example, "Almost every day after I ask a few simple questions, I get, 'By the way, I can recommend the idea of a birthday present so you can buy more from Amazon!'" Don't you want to hear that? One Alexa user complained in a post on the online social platform Reddit. No, Alexa, the answer has always been no. Just tell me the temperature. This may explain why some people unplug the smart language assistant and throw it into the closet.
Conclusion: Services that are close to the needs of users are smarter
Meta (Facebook parent company), Apple, Google and other companies have also been deployed in the field of intelligent voice, Apple's smart speaker HomePod and intelligent voice assistant Siri, Meta's virtual reality devices are also integrated with intelligent voice services, etc., and analysts in the technology industry have also made positive predictions for voice control.
Amazon's intelligent voice service business has about 25 percent ownership in U.S. households, though internal documents show that the period of rapid growth in the smart voice market is coming to an end. Therefore, in the future, intelligent voice assistants will introduce more new features and better symbiosis with humans is the way to break out of the siege. And Amazon's unnecessary new prediction function, which has been complained about by many users, is a negative teaching material.
Source: Bloomberg