Alexa is a $10 billion 'failure;' should you still buy an Echo during Black Friday?
Business Insider reports Amazon is losing billions on smart speakers, but this isn't a bad thing for consumers.
Amazon is currently laying off huge portions of its workforce. And according to a report from Business Insider (opens in new tab), the company will soon fire 10,000 more, many of whom will come from the Worldwide Digital unit that manages Echo devices and the Alexa app. Apparently, the division has lost billions every year for several years and is "on pace to lose $10 billion" in 2022.
If Alexa is a "colossal failure of imagination," as one former employee described it, should you care about the great Black Friday Amazon Echo deals available right now? Or should you steer clear?
Alexa is now ranked third behind Google Assistant and Siri in active users, and these users primarily use the assistant for "trivial" commands like asking about the weather. Barely anyone uses Amazon Skills to shop with partnered companies, and because Amazon sells Alexa devices at cost, the company has no way to recoup its substantial investment.
Amazon told BI that "We are as committed as ever to Echo and Alexa, and will continue to invest heavily in them," but with the Alexa workforce slashed down, it's not likely that Alexa will get a boost to its brainpower in the near future.
Here's the thing, though: that doesn't necessarily matter. As this report itself explained, people happily use Alexa to play music, start a timer, or ask for random factoids like why the sky is blue. As long as the assistant responds quickly and accurately, the majority of consumers won't care about anything else.
Echo Dot (5th Gen) |
$50 $24.99 at Amazon (opens in new tab)
The newest Echo Dot is the same price as the 4th Gen model but has a larger speaker and improved touch controls for stopping a song or alarm without having to speak to Alexa every time you want something. It's a solid price to get the basic Alexa commands you care about.
Every new Echo device uses the AZ2 Neural Edge chip, which we've tested in various reviews and gives Alexa a zippy response time to your questions and commands. We hope future Echos will be even faster, but given the Alexa division's fall from grace, you essentially have no reason to wait on something better in the near future.
Black Friday hasn't officially started, but you'll find some excellent Amazon Echo deals live right now. The superb new Echo Dot with Clock (5th Gen) is 33% off, our favorite Echo smart display — the Echo Show 8 — is $60 off, and the petite Echo Show 5 is just $35. Amazon will lose money on every single one it sells, but that's not your problem! You should happily take advantage of the behemoth company's poor business decisions if you need a smart speaker in your life.
Echo Show 8 (2nd Gen, 2021):
$130 $69.99 at Amazon (opens in new tab)
We consider the Echo Show 8 the best Echo Show because it strikes the perfect balance between the cheap, budget-quality Echo Show 5 and the expensive Echo Show 10. It gives you the same excellent 13MP selfie camera and visual quality as the 10. But you'll want to upgrade to the Echo Show 10 (currently $80 off (opens in new tab)) if you want stronger speaker quality and a screen that follows you around the room.
The only reason not to buy an Echo is if you're more confident in Google Assistant's future as a smart assistant. In that case, the Nest Audio — one of the best smart speakers — is also 50% off in the lead-up to Black Friday.
But The Information (opens in new tab) reported last month that Google too is cutting back on Assistant support on non-Pixel devices due to its own financial woes, because it, too, doesn't seem to make much money for the company.
Again, if you want to take advantage of Google's excellent AI while it loses money on the transaction, that's not a bad thing (for you). Your only decision is whether the Nest Audio or Echo speaker is a better fit!
Google Nest Audio:
$100 $50 at Best Buy (opens in new tab)
The Nest Audio speaker has fantastic audio quality in a nondescript pill shape that'll fit easily on any shelf. The 2.95-inch woofer and 0.75-inch tweeter deliver audio that our reviewer described thus: " "the low-end is clean and inviting, vocals come through beautifully, and there's no sharpness or sibilance at the high-end." Plus, of course, you get access to the most popular voice assistant in the world: Google Assistant.
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Michael spent years freelancing on every tech topic under the sun before settling down on the real exciting stuff: virtual reality, fitness wearables, gaming, and how tech intersects with our world. He's a semi-reformed Apple-to-Android user who loves running, D&D, and Star Wars. Find him on Twitter at @Michael_L_Hicks.