Some employees within Amazon’s once-legendary hardware division — responsible for popular devices like the Kindle reader and Echo voice assistant — say morale within the division has suffered from workforce cuts and a pipeline of devices in development that they fear they probably won’t be a big hit. The division, known as Lab126, was a focus for Amazon founder Jeff Bezos, who portrayed it as an engine for future projects, but has recently been plagued by mass layoffs and the departure of key executives, including 13-year leader Dave Limp . veteran who has announced plans to resign later this year.
Reuters interviewed more than fifteen current and former employees, who spoke on condition of anonymity because of their employment conditions, who described a hodgepodge of new devices in development, many aimed at encouraging customers to use the once-groundbreaking Alexa voice service that is now faces a tough challenge in the era of generative AI and ChatGPT.
The company – the world’s largest online retailer – is hosting a device and services launch event on September 20, which is expected to include refreshed versions of a number of existing products such as the Fire Tablet, Fire TV Stick and Kindle Scribe -e-reader. . Reuters was unable to determine Amazon’s full plans for the announcement.
The news agency was able to identify five different new devices in development. These include a carbon monoxide detector and a household energy consumption monitor – both with Alexa built-in – and a home projector to turn any surface into a screen. Some sources mentioned other projects, full details of which could not be confirmed.
Amazon hopes consumers will install Alexa devices in more rooms of their homes and become accustomed to using the system throughout the day, the sources said.
The company has also been working on an Alexa-enabled digital measuring device (to map the dimensions of someone’s home, for example) and a virus testing device initially intended to detect Covid, the people said.
Amazon is secretive about its internal projects at Lab126, which has long been crucial to its drive to position itself as a technology innovator. Not all will be produced commercially, sometimes due to financial or market issues, the sources say, while some have already been reworked or canceled altogether.
Although relatively small within the sprawling Amazon empire, the device unit has been symbolically important as a testing ground for gadgets and as Alexa’s public face through voice assistant devices. Amazon has said its devices and services business is unprofitable, without providing figures.
An Amazon spokesperson declined to comment on products in development.
“To suggest that a few anecdotes paint a picture of reality for an organization as large and diverse as Devices and Services is incorrect,” spokeswoman Kinley Pearsall said in a written response to questions about morale and devices at Lab126. The “company has been a key part of innovation for more than a decade, creating a range of products that are meaningful parts of people’s everyday lives.”
The sources said the lab’s years of losses and changing strategies have contributed to lowered morale. Many pointed to the Astro home monitoring robot launched in 2021, which remains niche at $1,600 (roughly Rs. 1,33,190) and has been criticized for giving some consumers the creeps.
That followed a series of poorly-selling devices, such as a clock with voice assistance, the Fire smartphone and a camera that doubles as a personal stylist, the sources said.
Amazon, the people said, is trying to address waning interest in its Alexa voice assistant, nearly a decade after its launch, and as it faces competition from AI chatbots from Alphabet’s Google and a host of startups, including the Microsoft-backed OpenAI. ChatGPT and other similar tools have dazzled consumers and investors since late last year with their ability to construct long and coherent text responses to complex prompts, a format that is difficult to translate to a voice assistant.
Amazon said it is developing its own generative AI to power Alexa, but has not revealed much beyond an August claim that “each of our teams is working on building generative AI applications.”
Alexa is typically accessible through devices such as Amazon televisions and Echo speakers, provides spoken answers to questions, and can be used to make purchases from Amazon’s online store. The company has also been working on turning Alexa into a home automation hub that can voice control lights and appliances.
However, Amazon has been unable to find a consistent way to take advantage of Alexa.
“Amazon’s ability to infiltrate consumers’ lives is limited because they don’t control the smartphone,” said Avi Greengart, president of analytics firm Techsponential. “Voice-first is not a great shopping experience,” he said.
Exodus
Limp, who has overseen device strategy including Ring video doorbells, plans to quit before the end of the year. According to Bloomberg, Amazon will appoint Microsoft’s Panos Panay as successor, who oversaw the development of the Surface. Microsoft declined to comment and Amazon did not respond to a request for comment.
Limp succeeds longtime executives Lab126 president Gregg Zehr and Alexa senior vice president Tom Taylor who both retired late last year. Ken Washington, who led Astro, left in May after less than two years to join Medtronic.
CEO Andy Jassy has reduced Amazon’s workforce after roughly doubling it during the pandemic in response to surging online sales. The cuts also affected Amazon’s retail, cloud computing, grocery and advertising divisions.
Alexa employees were involved in layoffs early last year, resulting in 27,000 job losses at Amazon. Despite the widespread popularity of voice assistants, Alexa, with 71.6 million users in 2022, lagged behind Google and Apple’s Siri, which had 81.5 million and 77.6 million respectively, according to analytics firm Insider Intelligence.
Amazon has said for years that it can sell devices for close to the cost of production and make a profit through the services it offers. That’s worked well for the Kindle group, as e-reader-owning consumers have been buying ebooks for years, with Amazon taking a cut of each sale.
Alexa is a different matter. Most monetization efforts have focused on facilitating purchases from Amazon.com. But a dozen people who have worked on Alexa say they haven’t seen strong evidence of customers buying things they wouldn’t otherwise buy.
Challenged by users like Bruno Borges, 40, from Vancouver, Canada, who said he only used his Echo for the timer, music and weather updates.
“I would never shop there because I can’t compare things like on the website, so I wonder if I’m getting the best deal,” he said. He recently put his three-year-old device away in a drawer and has no plans to continue using it.
Employees say leadership has shifted in recent years toward a push to produce devices more cheaply to potentially make money from selling the hardware itself.
That focus on price has caused delays to an advanced projector that Amazon is developing to project images across a room and turn ordinary surfaces into screens, according to five people familiar with the matter.
The projector allows a user to beam recipes onto the wall above the stove or make Zoom calls that follow them as they move. Amazon bought a startup called Lightform to help propel the project, but is committed to reducing the cost of the projector, which was previously offered by Lightform starting at $700 (approximately Rs. 58,260), by hundreds of dollars before it could be sold.
© Thomson Reuters 2023
