The division, known as Lab126, was a focus for Amazon's
founder Jeff Bezos, who portrayed it as an engine for future projects, but more
recently it has been buffeted by mass layoffs and key executive departures,
including leader Dave Limp, a 13-year veteran who has announced plans to step
down later this year.
Reuters interviewed more than 15 current and former
employees, who spoke on the condition of anonymity due to their employment
terms, who described a hodgepodge of new devices in development, many of them
aimed at encouraging customers to use the once ground-breaking Alexa voice
service that now faces a stiff challenge in the age of generative AI and
ChatGPT.
The company – the world's biggest online retailer - is
holding a devices and services launch event on September 20 where it is
expected to feature refreshed versions of some existing products like the Fire
tablet, Fire TV stick and Kindle Scribe e-reader, among other announcements.
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 a carbon monoxide detector and a
household energy consumption monitor - both with Alexa built into them – as
well as a home projector to make any surface a screen. Some of the sources
mentioned other projects, the full details of which could not 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, the sources said.
The company has also worked on an Alexa-enabled digital
measuring device (for instance, for mapping out the dimensions of one's home)
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 tech
innovator. Not all of them will be produced commercially, sometimes due to
financial or market concerns, the sources said, while some have already been
reworked or canceled altogether.
Though relatively small within Amazon's sprawling empire,
the device unit has been symbolically important as a gadget testing ground and
Alexa's public face through voice-assistant devices. Amazon has said its
devices and services business is not profitable, without providing figures.
A spokesperson for Amazon 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
inaccurate,” spokeswoman Kinley Pearsall said in a written response to
questions about morale and devices at Lab126. The “business has been a staple
of innovation for over a decade and has created a series of products that are
meaningful parts of people's everyday lives.”
The sources said the lab's years of losses and shifting
strategies have contributed to lowered morale. Many pointed to the Astro home
monitoring robot launched in 2021 that, at $1,600, remains niche and was
criticized for giving some consumers the creeps.
That followed a series of poorly selling devices, such as a
voice-assistant-powered clock, the Fire smartphone, and a camera that doubles
as a personal stylist, the sources said.
Amazon, the people said, is trying to address flagging
interest in its Alexa voice assistant nearly a decade after it was launched and
as it faces competition from AI chatbots from Alphabet's Google and a host of
startups, including Microsoft-backed OpenAI. ChatGPT and other similar tools
have dazzled consumers and investors since late last year with their ability to
construct long-form and coherent text answers to complex prompts, a format that
is difficult to translate to a voice assistant.
Amazon said it is developing a generative AI of its own to
bolster Alexa but hasn't revealed much beyond an August assertion that “every
one of our teams is working on building generative AI applications.”
Typically accessed through devices such as Amazon
televisions and Echo speakers, Alexa provides spoken answers to questions and
can be used for purchases from Amazon's online store. The company has also
worked to make Alexa a home automation hub to allow light bulbs and appliances
to be voice-controlled.
However, Amazon has failed to find a consistent means of
profiting from Alexa.
“Amazon's ability to infiltrate consumers' lives is limited
because they don't have control of the smartphone,” said Avi Greengart,
president of analysis 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 exit before year's end. Amazon is set to name as successor
Microsoft's Panos Panay who oversaw the development of the Surface, according
to Bloomberg. Microsoft declined to comment and Amazon did not respond to a
request for comment.
Limp follows longtime executives Lab126 president Gregg Zehr
and Alexa senior vice president Tom Taylor who both retired late last year. Ken
Washington, who oversaw Astro, left after less than two years to join Medtronic
in May.
CEO Andy Jassy has been reducing Amazon's headcount after
roughly doubling it during the pandemic in response to surging online sales.
The retrenchment also affected Amazon's retail unit, cloud computing, grocery,
and advertising divisions.
Alexa employees were included in rounds of layoffs beginning
last year resulting in 27,000 job cuts across Amazon. Despite broadly
popularizing voice assistants, Alexa, with 71.6 million users in 2022, trailed
Google and Apple's Siri, which had 81.5 million and 77.6 million, respectively,
according to analysis firm Insider Intelligence.
For years, Amazon has said it can sell devices for close to
production cost and see a profit through services offered to them. That's
worked well with its Kindle group, as consumers who own an e-reader purchase
e-books for years, with Amazon taking a cut of each sale.
Alexa is another matter. Most efforts to make money from it
have centered on easing purchasing from Amazon.com. But a dozen people who have
worked on Alexa say they haven't seen strong evidence customers are buying
things they wouldn't otherwise.
The challenge is users like Bruno Borges, 40, of Vancouver,
Canada, who said he found he used his Echo only for its timer, music and
weather updates.
“I would never shop on it because I cannot compare things
like on the website, so I wonder if I‘m getting the best deal,” he said. He
recently stowed his three-year-old device in a drawer and has no plans to
continue using it.
Employees say leadership has in recent years shifted towards
a drive to produce devices for cheaper to potentially make money on the sale of
hardware itself.
That focus on price has caused delays for an advanced
projector Amazon is developing to cast images around a room, turning regular
surfaces into screens, according to five people familiar with the matter.
With the projector, a user could beam recipes on the wall above their stove or make Zoom calls that track them as they move. Amazon bought a startup called Lightform to help propel the project but has been bent on lowering the projector's cost, previously offered by Lightform starting at $700, by hundreds of dollars before it could be sold. © Reuters