Some employees in Amazon’s once-famous hardware division, responsible for popular devices such as the Kindle reader and Echo voice assistant, say morale in the unit is suffering due to layoffs and a slew of devices in development that they fear are unlikely to take off. was affected. The unit, known as Lab126, was a focus of Amazon founder Jeff Bezos, who described it as an engine for future projects, but it has recently been hit by mass layoffs and the departure of key executives. Among them is leader Dave Limp, who has been with the company for 13 years. Veterans who have announced plans to resign later this year.

Reuters spoke to more than 15 current and former employees, who asked not to be identified because of the terms of their employment, who described a variety of new devices in development, many aimed at encouraging customers to use the once groundbreaking Alexa voice service now in Generative. The era of artificial intelligence and ChatGPT faces severe challenges.

The company, the world’s largest online retailer, will hold a device and service launch event on September 20, and is expected to launch updated versions of some existing products such as Fire tablets, Fire TV sticks and Kindle Scribe e-readers. . Reuters was unable to determine Amazon’s full plans for the announcement.

The news agency was able to identify five different new devices under development. These include carbon monoxide detectors and home energy monitors (both with Alexa built-in), as well as home projectors that turn any surface into a screen. Some sources mention other projects, but their full details cannot be confirmed.

Amazon hopes consumers will install Alexa-enabled devices in more rooms of their homes and become accustomed to using the system throughout the day, sources said.

The company has also developed an Alexa-enabled digital measuring device (for mapping the dimensions of a house, for example) and a virus testing device originally designed to detect the coronavirus, people familiar with the matter said.

Amazon has been tight-lipped about its internal Lab126 project, which has long been critical to its positioning as a technology innovator. Not all projects will go into commercial production, sometimes due to financial or market concerns, while some have been redesigned or canceled entirely, sources said.

Although relatively small in Amazon’s vast empire, the devices unit carries important symbolic weight as a testing ground for gadgets and the public face of Alexa through voice-assisted devices. Amazon said its devices and services business has yet to make a profit but did not provide specific figures.

An Amazon spokesman declined to comment on products in development.

“It is inaccurate to believe that anecdotes paint a picture of the reality of an organization as large and diverse as Equipment and Services,” Lab126 spokesperson Kinley Pearsall said in a written response to questions about morale and equipment. “For more than a decade, the The business has been at the forefront of innovation and creating a range of products that are meaningful to people’s daily lives.”

Sources say years of losses and strategic shifts at the lab have led to low morale. Many pointed out that the Astro home monitoring robot, launched in 2021 and priced at $1,600 (approximately Rs. 1,33,190), is still niche and has been criticized for scaring some consumers.

That was followed by a series of devices that didn’t sell well, such as a voice assistant clock, a Fire smartphone and a camera that doubled as a personal stylist, sources said.

Amazon is trying to address waning interest in its Alexa voice assistant nearly a decade after its launch and faces competition from artificial intelligence chatbots from Alphabet Inc’s Google and a host of startups including Microsoft-backed OpenAI, people familiar with the matter said. compete. ChatGPT and other similar tools have dazzled consumers and investors since late last year with their ability to construct long, coherent text answers to complex prompts, a format that is difficult to translate to voice assistants.

Amazon says it’s developing a form of its own generative AI to power Alexa, but hasn’t revealed much beyond an August statement that “every one of our teams is working on building generative AI applications.” .

Alexa, commonly accessed through devices such as Amazon TVs and Echo speakers, provides spoken answers to questions and can be used to make purchases from Amazon’s online store. The company is also working on making Alexa a home automation hub, allowing voice control of light bulbs and appliances.

However, Amazon has failed to find a consistent way to monetize Alexa.

“Amazon’s ability to penetrate consumers’ lives is limited because they don’t have control over their smartphones,” said Avi Greengart, president of analytics firm Techsponential. “Voice-first is not a great shopping experience,” he said.

Exodus

Limp, who oversees device strategy including video doorbells, plans to exit by the end of the year. According to Bloomberg, Amazon will name Microsoft’s Panos Panay as its successor, who is responsible for the development of Surface. Microsoft declined to comment, and Amazon did not respond to a request for comment.

Limp’s previous long-time executives, Lab126 president Gregg Zehr and Alexa senior vice president Tom Taylor, both retired late last year. Astro chief Ken Washington left in May after less than two years to join Medtronic.

Amazon Chief Executive Andy Jassy has been reducing Amazon’s workforce after doubling it during the pandemic to cope with a surge in online sales. The layoffs also affect Amazon’s retail, cloud computing, grocery and advertising units.

Alexa employees have participated in multiple rounds of layoffs since last year, resulting in 27,000 layoffs across Amazon. Despite the widespread popularity of voice assistants, Alexa will have 71.6 million users in 2022, trailing Google and Apple’s Siri, which have 81.5 million and 77.6 million users respectively, according to analytics firm Insider Intelligence.

Amazon has said for years that it can sell devices at close to production costs and make profits from the services it provides to the devices. This works well in the Kindle group because consumers who own e-readers buy e-books over the years, and Amazon takes a percentage of each sale.

Alexa is another story. Most efforts to make money from it focus on easing purchases from the Amazon website. But more than a dozen people who have worked at Alexa say they haven’t seen strong evidence that customers are buying things they wouldn’t otherwise.

The challenge lies with users like Bruno Borges, 40, of Vancouver, Canada, who said he finds himself using the Echo only for timers, music and weather updates.

“I would never shop there because I can’t compare what’s on the site, so I want to know if I’m getting the best deal,” he said. He recently put his three-year-old device in a drawer and has no plans to continue using it.

In recent years, employees said, leadership has shifted toward producing equipment more cheaply, potentially making money by selling the hardware itself.

Price concerns have led to delays in an advanced projector Amazon is developing that can project images across a room, turning ordinary surfaces into screens, according to five people familiar with the matter.

With the projector, users can project recipes onto the wall above the stove or make a Zoom call to track them as they move. Amazon acquired a startup called Lightform to help drive the project, but has been working to bring down the cost of the projector, which previously started at $700 (roughly Rs. 58,260), before being sold for hundreds of dollars less.

© Thomson Reuters 2023


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