Potential Alexa user fee suggests a renewed focus on earnings – Amazon

According to a Reuters story published last week, Amazon intends to replace its existing voice assistant by August with a two-tiered, AI-powered "Remarkable Alexa."

In addition to the $139 yearly Prime membership, there will be a $5 to $10 monthly subscription cost for the premium tier, which will employ powerful AI for complicated searches. Personalised services and complex activities, including sending emails and placing Uber Eats orders with a single prompt, will be available in the subscription edition.

Analysts from Bank of America responded to the announcement by stating that Alexa "will need to improve to stay competitive with AI advances from competitors."

They went on, "We think Amazon could cut Alexa investment further to reduce losses if Amazon does not see adoption of a paid tier."

According to BofA, there are presently 100 million active Alexa users. If 10% of them sign up for a $5 monthly subscription to an improved Alexa, that could be an extra $600 million in income for AMZN.

"With 10% adoption of a $10/month subscription, this income would correspond to 2.6 percentage points of growth to our 2025 Subscription sales forecast at $49 billion,” the bank stated.

(Sources: investing.com, reuters.com)