Amazon’s voice assistant is hanging on by a thread. And that thread is generative AI—or, in Amazon’s case, Alexa+.
Amazon hasn’t had a problem getting people to buy cheap, Alexa-powered gadgets. However, the Alexa in millions of homes today doesn’t make Amazon money. It’s largely used for simple tasks unrelated to commerce, like setting timers and checking the weather. As a result, Amazon’s Devices business has reportedly been siphoning money, and the clock is ticking for Alexa to prove its worth.
Alexa+, a subscription-based generative AI service ($20 per month or included with Prime, which starts at $15/month), is supposed to solve Amazon's woes with Alexa. More conversational and powerful than the original Alexa, Alexa+ is designed to play a more central role in user transactions, enabling, in theory, Amazon to finally make money from voice assistants after 11 years.
Today, at its Devices event in New York City, Amazon unveiled new gadgets built to usher in what Amazon hopes is a new era of chatting, shopping, watching TV, and controlling smart homes with Alexa+. These devices are supposed to have the power to make Alexa+ as successful and reliable as possible.
But can Amazon convince people to pay more for new devices after establishing a reputation for cheap gadgets?
Amazon’s new devices are more expensive
Amazon announced a lot of new hardware at its Devices event (including for devices without Alexa+, like Ring and Blink cameras and Kindles). The most relevant for Alexa+ are the new Echo smart speakers and smart displays, the majority of which are more expensive than prior or similar releases.
In the speaker category is a new Echo Studio for $220. That's 10 percent more than what Amazon charged when it launched a white and software-updated version of 2019’s Echo Show ($200).
There's also a new type of Echo speaker, the Echo Dot Max. It will be $100, compared to the $50 launch price of the Echo Dot in 2022.