Key Takeaways:
- Amazon's Echo started well, but interest dropped over the years, which led to layoffs and soured the company’s reputation.
- Alexa was getting a billion voice requests each week. The problem was music and weather requests summed up the bulk of requests.
- The Covid-19 pandemic steered people to buy online, and for Amazon, that is making analysts believe the stock will rise 50% this year alone.
WISCONSIN (CoinChapter.com) — A few years ago, Amazon’s Echo was a true novelty that produced many sales. When the voice-assistant device first came out, 4.4 million units were sold; today, it is being called a failure.
When Amazon announced layoffs last year, the number of employees affected was estimated to be 10,000; in actuality, the number is even worse at “just over 18,000.”
The company’s Alexa device was responsible for the biggest losses Amazon encountered. Though the device is a one-time buy, competition from Apple and Google came into play. Additionally, a music subscription is required if one wants to listen to certain songs by certain artists.
Alexa Was a Plan That Never Materialized
Executives at Amazon knew they were on to something with a novelty device wherein one could speak commands and get results. But it was later understood that people did not trust an artificial intelligence devices.
After a few years of use, Amazon learned that although the device was getting one billion interactions weekly, almost all requests were the same: to play music or ask about the weather.
Around 2020, former CEO Jeff Bezos began to lose interest in Alexa but gave it one last hearty try. Mr. Bezos approved of a voice command that could buy food or call Uber; the result was a failure – simply a lack of use.
While Amazon struggled internally to figure out a use for voice-assistant devices, Google and Apple passed them by. Google Assistant reached 81.5 million users, Apple’s Siri had 77.6 million, and Amazon’s Alexa had 71.6 million.
What Does This All Mean To Investors?
Last year was brutal for investors holding Amazon stock (NASDAQ: AMZN). First, the stock lost half of its value due to panic and fear during the early stages of Covid-19. Then, people began to look at Amazon as a source of safer shopping instead of traditional brick-and-mortar stores.
Amazon took advantage of online sales increases and developed Amazon Web Services (AWS). As a result, AWS has a 34% share in an over $200 billion marketplace.
According to Kiplinger, 34 analysts rate AMZN stock as a strong buy, 15 calls it a buy, two advise a hold, and only one said it is a sell. Wall Street’s average forecast is $142.70 – 50% higher than today.
