Alexa Is in Millions of Households—and Amazon Is Losing Billions (Category Management)

Continue reading “Working backwards” Article from The Wall Street Journal How Amazon’s smart devices created successful products that generated billions of losses each year. This case is interesting to disassemble in conjunction with the example about the Kindle from the second part of the book. (detail here). The essence of the article is approximately the following

• In 2014 The year was launched Echo and Alexa with a model like Gillette, where the machine itself was sold for pennies, and then earnings were on replaceable blades. The same was true for Amazon, which dumped the Echo.
• Through. 10 Over the years, hundreds of millions of people have Echo, but this approach didn’t work – people didn’t make meaningful purchases on Amazon through Alexa. When Jeff Bezos was CEO, device direction was green-lighted and measured using the “downstream impact” metric, which assigns financial value to a product or service based on how customers spend money in the Amazon ecosystem after they purchase it. For some products, this approach worked well. For the Kindle, since after buying a reader, users bought e-books on Amazon. For Fire TV, where advertisements could be attributable to the Fire TV product itself. But for some devices, it didn't work very well. 2021 When Andy Jassy became CEO, he made a review of the profitability of the business lines and plunged into the business of devices where they were closed: Astro, Halo fitness tracker, Amazon Glow and so on. But now for Alexa the key point is that the guys will add gen AI, which will expand the functions of the assistant, and also bring additional money to the company’s treasury through an additional subscription.

P.S. In general, the book + article look more interesting together:)

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