Amazon has denied claims that consumers are losing interest in Alexa after leaked company documents predicted a slump in sales growth.
Internal company documents viewed by Bloomberg revealed as many as 15 per cent of new Echo owners were no longer using the Alexa assistant in their second week of owning one with analysts admitting the market has passed its “growth phase,” predicting just 1.2 per cent sales growth in the next few years.
Amazon insisted that its Alexa device remains a popular device and said claims that the product’s novelty has worn off are inaccurate.
Amazon told City A.M. “the assertion that Alexa growth is slowing is not accurate. The fact is that Alexa continues to grow—we see increases in customer usage, and Alexa is used in more households around the world than ever before. Tens of millions of customers use Alexa every day, and we are as optimistic about Alexa’s future today as we have ever been.”
In further comments to City A.M. Amazon denied claims that consumers are losing interest in Alexa over privacy concerns after it emerged in 2019 that customer voice recordings were being reviewed by humans to check for errors. “Privacy is foundational to how we design and deliver every device, feature, and experience,” Amazon said in a statement.
The Echo device was unveiled in 2014, and recent documents suggested that consumers are not buying into the ‘internet of things’ concepts at the same rate as Amazon are developing the product; most consumers will use Alexa devices for music and simple questions.
Amazon continues to spend big on developing the product despite the market reportedly having passed its peak growth phase. More than 10,000 people are employed to help improve Alexa, giving the project anticipated fixed costs of $4.2bn in 2021, with the company predicting it will lose $5 per device by 2021.
While internal documents from Amazon suggested a slow down in sales growth this does not mean that consumers aren’t still interested in Amazon’s products.
According to consumer research from Ampere Analysis, 52 per cent of internet households own a voice assistant device in the UK, with Amazon’s products being the most popular choice.