Why would consumers care if they are sustainable? If I get my value out of the product before it is bricked, I don't care if the company lost billions or even trillions of dollars?
Most don't --- it's typically out of sight, out of mind.
Most consumers don't care that credit cards consume 2.5% of the purchase price. But they ultimately pay for it.
Likewise with Amazon, their projected $10 billion loss on Alexa toys this year alone affects the price of everything else you buy from them.
If I get my value out of the product before it is bricked
And if you don't? It takes time, effort and money to fully incorporate Alexa into your home. The speaker is only the first part of the cost.
Personally, I'm reluctant to do this if I know the product is a marketplace loser on the verge of being axed.
Precisely the point.
$10 billion is a decent hit to the bottom line. If they choose to absorb it, it typically rolls down to the consumer somehow.
If not, I can see a dead simple way to add $10 billion to profit --- shut down Alexa.
Neither of these options inspires a lot of confidence in the future of the product.
This is a separate question on whether you can get $15 a value out of a speaker before they cancel the program.
Uber might not have a long-term viable business model, but that won't stop me from taking a ride if I like the price. I'm a consumer not a investor.
If your point is that consumers might care about the long-term support for Alexa, then I agree that those consumers should be wary.
They just screwed up lol and customers who took advantage won out.
These devices just collect audio data and send it to Amazon for processing. Without the backend service, they are useless.
They aren’t losing $10 billion on hardware on a $15 device.
The stats I've seen say they sold roughly 80 million of these this year. To be sustainable, this $15 device would have to cost in the neighborhood of $115 each.
If they can't sell them for at least a break even price, they are likely to do what Microsoft did and shut the whole thing down --- and leave you with a cheap brick.
Their initial plan and motivation was flawed. They were expecting consumers to use these things to just blindly order stuff from Amazon --- at a price most advantageous to Amazon of course.
Consumers may be pretty stupid but it turns out they aren't *that* stupid --- enough to blindly make purchases just for the thrill of doing it with their voice. Very few are using them for this.
Why don’t you give that a little more thought.
Is this enough thinking for you?
Adjustments can undoubtedly be made to bring this more inline with what the market will bear but it will almost certainly have to be much higher than $15 to break even.
It turns out that Amazon is subsidizing these things and is on track to lose $10 billion on them this year alone.
The price of everything on Amazon is higher because of these cheap toys.
no point in waiting
No point in buying if they aren't sustainable.