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Amazon's new paid Alexa service aims to address a $25 billion deficit caused by Echo devices.
Amazon's new paid Alexa service aims to address a $25 billion deficit caused by Echo devices.

Tech

Amazon’s new paid Alexa service aims to address a $25 billion deficit caused by Echo devices.

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Amazon is reportedly planning to introduce a paid version of Alexa as part of a broader effort to counter the over $25 billion in losses from its devices division between 2017 and 2021, according to The Wall Street Journal. This enhanced AI-powered Alexa, potentially priced at up to $10 per month, could debut as early as this month.

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However, there are internal doubts about the readiness and appeal of the new Alexa. An employee from the Alexa team mentioned that they are rushing towards the launch deadline despite the technology not being fully prepared.

Illustration showing Amazon’s logo on a black, orange, and tan background, formed by outlines of the letter “A.”

The intention to charge for an upgraded Alexa was first mentioned by Amazon’s former head of devices, David Limp, last year.

The upgraded Alexa is expected to feature generative AI capabilities, enabling it to handle multiple tasks in one prompt and learn user preferences to create routines. Yet, reports indicate Amazon is significantly behind schedule. According to Fortune, Alexa is far from achieving Amazon’s goal of becoming “the world’s best personal assistant,” hindered by both technical and organizational challenges.

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There are also concerns about whether consumers will be willing to pay for an Alexa subscription in addition to Amazon’s $139 per year Prime membership. Given that basic AI assistants like ChatGPT, Google Gemini, and the soon-to-be-improved Siri are free to use, Amazon might struggle to convince users to pay for Alexa, especially since the current version will remain free.

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