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Amazon launched the smart devices with the Alexa in 2014.
According to internal documents, Amazon lost over $25 billion in its machine business between 2017 and 2021.
Windows 10 19H2 update brings better integration with Alexa, other digital assistants
Interestingly,Amazonis still “well-positioned” and has established numerous profitable businesses under its devices department.
How does the division continue to run despite the reported losses?
During Jeff Bezos' era as CEO, Amazon picked up an obscure metric dubbed downstream impact.
This explains how the gadget division remained afloat despite the huge losses.
Another example is when customers buy smart-camera doorbells from Ring, they automatically get security subscriptions, too.
In such an instance, Amazon thinks of the purchase and subscription as direct revenue.
Amazon Music (with a $10 monthly subscription) also helped make Echo devices seem profitable.
Despite the struggling business, Amazon’s unit department grew to more than 15,000 staffers across its products.
We had to get the system in peoples homes, and wed win.
Innovate, and then figure out how to make money later.
Jeff Bezos' reign at Amazon was seemingly more focused on shipping high-tech products to consumers than making profits.
At the time,Googlewas also venturing into the smart home devices landscape with significantly low-priced alternatives.
Google and Amazon were striving to get their devices in every household.
We were constantly checking their pricing."
stated a former member of the Echo team.
Jassy reportedly required team leaders to demonstrate the profitability path for various products without utilizing the downstream impact metric.
Amazon is reportedly working on an Alexa refresh Remarkable Alexa.
The product will feature new technology and more sophisticated capabilities.
