Amazon Still Wants an Alexa in Every Home. Hence, Her M-AI-keover

As the old adage goes, if at first you don’t succeed, try, try again, and if you’re still getting nowhere, just go out and poach one of the world’s foremost tech product designers. OK, that’s not part of the adage, but you know what we mean. 

On Tuesday, Amazon unveiled its latest line of Alexa-powered Echo home speaker devices, the first products designed under the tutelage of consumer electronics lead Panos Panay, who was snagged from Microsoft two years ago to revive the e-commerce giant’s struggling device unit. The Echo debut was part of a wide-ranging Amazon hardware makeover that included a new Kindle e-reader.

Echoes of the Past

There’s a reason Amazon wanted fresh eyes on its Alexa line of products. Launched in 2014, the Echo home speakers were loss-leaders by design, the idea being that the cost the company ate to move scores of devices into homes would be worth it if Echo owners used the devices to indulge in even more e-shopping. Consumers didn’t bite, and Echo devices proved better as free kitchen timers than sales-robots, as well as far worse conversationalists than emerging AI-powered chatbots. In late 2023, Amazon laid off “several hundred” employees in its Alexa division.

Amazon tapped Panay around the time of the layoffs, and quickly prioritized thoroughly AI-ifying Alexa’s personality. Tuesday’s debut of new devices has been long in the making. Amazon had initially planned to unveil the new Echo hardware and Alexa software in October of last year, according to internal documents seen by Bloomberg, only to be delayed until 2025. Amazon debuted the AI-powered Alexa+ upgrade, which requires either a Prime membership or a standalone $20 monthly subscription, this February. 

Now, the company is looking to revive its entire hardware line and dig itself out of a giant money hole:

• Tuesday’s announcements included the lower-end $100 Echo Dot Max, the $220 Echo Studio (designed specifically for “audiophiles”) and two revamped models of the Echo Show, which include a screen. Amazon also unveiled new Kindles, a new 4K Fire TV Stick and upgraded versions of its popular home security devices, Ring and Blink.
• Amazon doesn’t specifically report revenue from its hardware and device division, but by all accounts, it’s a dismal performer. According to internal documents reported by The Wall Street Journal last year, the unit racked up $25 billion in losses between 2017 and 2021.

Read the Room: That’s not to say Amazon is completely hapless in hardware. Last year, Ring products became profitable. Meanwhile, the company said on Tuesday that its Kindle line, which launched in 2007, is on track for its third consecutive year of double-digit sales growth. You could write a book.