How Amazon’s Struggles May Affect Smart Home Owners
Article by Jay Basen Feb 15, 2023
People that use Alexa devices as the primary user interface to control their smart home should be concerned about the news coming out of Amazon. CNBC reported that Amazon would be cutting approximately 18,000 people. While many of these job losses are said to come from the company’s devices organization, Dave Limp, the head of Amazon’s hardware division, said that the company remains committed to Alexa.
ARS Technica reported that Amazon Alexa was on pace to lose $10 billion in 2022. And, an article in TheStreet is titled, “Amazon Needs to Kill Alexa, Maybe Exit Echo Devices.” Then, an article in Gizmodo quotes a Consumer Intelligence Research Partners (CIRP) report that Amazon Prime subscriptions are in decline. Finally, a BBC News article titled, “Have we fallen out of love with voice assistants?” talks about how people are, more and more, finding the interactions they have with voice assistants to be annoying instead of helpful.
In addition, a story that hasn’t made the news is how post office issues in rural America could also start to impact Amazon. Amazon Prime has become a mainstay in rural America where access to large retailers, that offer lower prices, can be limited. Prime shipping has provided people living in rural areas inexpensive access to consumer staples and other products that previously were expensive to purchase, or subject to long shipping times.
The delivery dates that I experience for Prime shipping are much longer than the two-day shipping that the service used to provide. In addition, Amazon seems to have migrated to shipping the majority of items through the U.S. Postal Service. This is a problem in some rural areas where the USPS is struggling.
Post offices are suffering from the same challenges as other companies when it comes to retaining personnel and hiring new people. My local post office has operated at staffing rates as low as a quarter of the normal staffing level. Lower staffing has resulted in significant delays in mail delivery. A recent Amazon purchase took a full two weeks to arrive, and this is much faster than when our post office’s staffing was at its lowest levels. What good is paying for a Prime subscription if consumer staples, medication, and other time-sensitive purchases may take weeks to arrive?
A friend of mine is a business owner. He used to buy a great many supplies for his business from Amazon. They offered a real-time savings compared to other avenues available to him for purchasing business supplies. However, these same shipping delays have forced him to give up on Amazon purchases that his business now finds elsewhere.
If Amazon Prime subscriptions, and purchases from people who can’t afford to wait for their items to arrive on an indeterminate date, drop further because of shipping issues with the postal service, then this will put even more financial pressure on Amazon. Given the losses in Alexa’s devices division, this is more bad news for smart speaker division.
I am not predicting that Amazon is going to kill Alexa. Given the number of Alexa devices that Amazon has sold, I can’t even imagine the size/number of class action lawsuits that would be brought against Amazon if that happened. These lawsuits would not only originate from consumers. They would come from all the businesses that have invested in adding Alexa support to their products. Make no mistake that Amazon has deep pockets, and everyone would want a piece of their pie.
This article first appeared at residential tech today on Feb 15 2023