Alexa Is A Costly Success For Amazon

The people love Alexa — which is good news, since it is costing Amazon a whole lot of money to keep it on the market. According to reports, Alexa cost Amazon $330 million in 2016 alone — and the experts are forecasting that figure will increase to $600 million in 2017.

The report comes out after reports that Apple has been investigating the creation of a stand-alone Siri device — and is perhaps in the prototype-testing phase of such a design.

Like the Echo, the Siri speaking would have the capacity to look up information and wire into various smart home designs using voice recognition. There are also rumors about facial recognition technology being built in — care of Apple’s recent acquisition of Faceshift and Emotient.

Will that device construction project look as tempting now that it is known that Alexa is not exactly a money maker? Probably not. Amazon may not be making money, but then — Amazon is known for loss leading as it consolidates markets. Apple, being Apple, is good at the bottom line and has a wide range of devices — phones, iPad and TVs — that an investment in Siri could improve and make more profitable down the line.

And leveled-up Siri also has the merits of helping Apple pursue its bigger future vision — that may or may not include the Apple Car and certainly does include its smart home product line Home Kit.


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