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In 2014, a bright-eyed Alexa came into the world. The young voice assistant quickly honed its public speaking chops and loaded even more skills on its resume. By January 2019, Amazon bragged Alexa’s installed base had passed 100 million devices.
Does Alexa need to upskill?
Amazon’s Alexa unit has a headcount of ~10,000 now focused on monetizing more aspects of the assistant, The Information reported Monday. That’ll mean better leveraging the 100,000 skills (voice apps) built on the Alexa platform.
- Common skills include news briefings, to-do lists, smart home controls (like turning on the lights), and in-car voice commands (like playing music).
In-skill purchases registered $1.4 million in revenue in the first 10 months of 2019, falling short of Amazon’s $5.5 million target. Last year, revenue was in the “low hundreds of thousands” (vs. a $5 million target).
- Think of Alexa skills like an app store. When you make purchases through the app marketplace, Apple and Google usually take a 30% cut and developers take the rest. Amazon similarly takes a 30% cut of purchases made through skills.
Amazon’s still a proud parent
Dave Limp, the company’s hardware and services chief, said in September that billions of dollars of transactions pass through “the Alexa flywheel every year.”
And forgetting skills for a second, Amazon has successfully completed the three steps of Alexa hardware parenting:
- Make Alexa a living room mainstay
- Expand Alexa compatibility to as many smart home devices as possible (85,000 at last count)
- Experiment with new Alexa-enabled gadgets, from a ring to eyewear
Bottom line: Focus on Alexa in-skill purchase revenue and you’ll miss the forest for the trees. The assistant is scaling its installed base and widening the flow of voice commerce. If Alexa can peddle more in-skill purchases and premium voice services, that’s an added bonus.
+ While we’re here: You can now get Alexa in Samuel L. Jackson’s voice. The upgrade—and it’s definitely an upgrade—costs $0.99 until 2020.