the profit is the data they use to make money elsewhere. They take a loss to not pay taxes. Companies need to pay off the top.
I’m very skeptical that the data Alexa collects is anywhere near as valuable as people seem to believe it is.
On the highest level, they have a constant firehose of as much audio data from a sea of customers as they wish.
Send it to cheap overseas transcribers, use it to train and improve voice recognition and automatic transcription.
Have a backchannel to television viewing and music listening patterns.
Know when different customers are home or not, improving demographics data.
Know what is discussed within the house for data on ad penetration/reach, brand awareness, and better advertisement targeting.
It’s not a direct data to money pipeline, but having an always on listening device in someone’s home nets you a ton of useful data as an online retailer and advertiser.
having an always on listening device in someone’s home
They very explicitly do not collect audio when you haven’t used a wake word or activated it some other way. They will not “know what is discussed within the house for data on ad penetration/reach” (which is pretty much the only valuable data you’ve mentioned here), nor will they “have a backchannel to television viewing and music listening patterns” unless you actively discuss it with your device.
I’m not going to put words in your mouth, but if whoever reads this is thinking of replying “are you going to trust that” etc, yes I am. We can track which data an Alexa transmits in real time and directly verify this “always listening” isn’t happening. Even if we couldn’t independently verify that his is the case, and lets say they contradict their privacy policy and public statements and do it anyway, that’s a crazy liability nightmare. Amazon has more than enough lawyers to know that unconsentually recording someone and using that data is very illegal in most places, and would open them up to so many lawsuits if they accidentally leaked or mishandled the data. Take the conspiracy hat off and put your thinking cap on.
Send it to cheap overseas transcribers, use it to train and improve voice recognition and automatic transcription.
Bad for privacy, but also not a $25 billion dollar source of revenue.
Alexa, Google Home, and Siri devices are not good sources of data. If they were, why would Google, king of kings when it comes to data collection, be cutting their Assistant teams so much?
No company blows 25 billion on purpose without a reason
It’s a good thing their reason is explained very clearly in the article linked in this post. They believed Alexa would have a high “downstream impact”, i.e.generate sales or subscriptions elsewhere in the company. Which it has so far failed to do.
Amazon wants the loss to avoid paying taxes. They would never admit it is doing well collecting data.
Can you explain to me exactly how moving where profit is recorded from one division to another in the same organization reduces their tax burden? Because, excuse me, I know I only did a year or two of accounting courses before dropping the degree, but that’s not how I understand taxes to work.
Also to be turning a profit by “doing well collecting data”, the open market value of the data Alexa alone annually generates would need to be around 8% of the entire global data market. If you can justify how millions of instances of “Alexa set a timer for 10 minutes”, “Alexa what is the weather”, or “Alexa play despacito” generates that much value, maybe you have a point.
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Read the next paragraph, I already addressed you armchair conspiracy theoriests. We can independent verify their claims by analysing the device’s network traffic, I’ve literally done it myself and seen with my own eyes that it doesn’t happen. If you don’t believe me, you can also check for yourself.
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How much computing power do you think it takes to approximately recognise a predefined word or phrase? They do that locally, on device, and then stream whatever audio follows to more powerful computers in AWS (the cloud). To get ahead of whatever conspiratorial crap you’re about to say next, Alexa devices are not powerful enough to transcribe arbitrary speech.
Again, to repeat, people smarter than you and me have analysed the network traffic from Alexa devices and independently verified that it is not streaming audio (or transcripts) unless it has heard something close (i.e close enough such that the fairly primative audio processing (which is primitive because it’s cheap, not for conspiracy reasons) recognises it) to the wake word. I have also observed this, albeit with less rigorous methodology. You can check this yourself, why don’t you do that and verify for yourself whether this conspiracy holds up?
But jumping at the shadows is sometimes all the exercise we get!
And who knows what secrets they may be trading for favors as well?
Are you confusing Alexa and Trump?
The idea is that people will be willing to pay a recurring fee to use Alexa if it can do more advanced things, like perform multiple commands without the user having to say “Alexa” repeatedly, be more conversational, and manage smart homes more intuitively. Amazon is considering charging $5 to $10 per month for generative AI Alexa,
I don’t know if that’s worth $5-10/mo. I use Google Nest products at home, mainly to control lights. And yeah it sometimes annoying to be like, “Hey Google do this…Hey Google, do that…Hey Google, do whatever…” But at that point, I usually just use the Google Home app or a specific IoT app. And that’s free.
If Amazon started charging for smart-home solutions, they’d essentially be making the case for FOSS solutions like home assistant.
Granted, there will always be a contingent of people who are unwilling to learn how to self-manage that tech, but there are certainly enough people who are willing that they should think twice about heading down that path.
I mostly go “Hey Google…” in the dark, often with my eyes closed, in bed. At this point, there is nothing I can think of that I’d like to pay it to do for me in that situation. Some searches, basic calculations, setting alarms, and music, is all I need.
Pretty sure each of the companies selling smart home systems like this want to become the dominant go to system, so focusing on earning profits doesn’t make much sense. You want to lure customers into your ecosystem and for your solution to become so dominant you become a monopoly, or at least so you don’t fall behind and let someone else become ubiquitous. I view it as amazon building infrastructure and supporting future endeavors.
I feel like I see more people using (Google) Assistant and Siri than Alexa, though.
You’d be surprised. Whenever I’m watching webcams, I always hear people call to Alexa. Siri ranks second and I only hear people call Google by accident.
