We are living in a world where consumers are willing to pay heaps of cash to make their lives easier.
This is exactly the opportunity Amazon.com is tapping into, with its smart device Amazon Echo becoming a market favorite in the past years.
Amazon Echo sales figures witnessed a drastic increase over the past years.
As a result, the tech giant released more units and models with new and improved features.
But is it a profitable business?
Let’s find out.
Amazon Echo Sales Figures Over the Years
Amazon Echo entered the market in 2014.
This is at a time when no other technology company realized consumers will be willing to pay for devices that can perform simple daily tasks such as setting up an alarm, playing Taylor Swift’s songs, and turning the light off.
Take a look at Amazon Echo’s unit shipment history from 2014 to 2021:
- 2014 – only 600,000 Amazon Echo units were shipped worldwide during the year
- 2015 – 2.2 million Amazon Echo units were shipped worldwide during the year
- 2016 – 8.5 million Amazon Echo units were shipped worldwide during the year
- 2017 – 26.2 million Amazon Echo units were shipped worldwide during the year
- 2018 – 32.0 million Amazon Echo units were shipped worldwide during the year
- 2019 – 42.0 million Amazon Echo units were shipped worldwide during the year
- 2020 – 53.9 million Amazon Echo units were shipped worldwide during the year
- 2021 – 63.0 million Amazon Echo units were shipped worldwide during the year
As can be observed from the figures above, Amazon Echo did not hit 20 million shipments until 2017, four years after its launch.
Being the first in the field, Amazon Echo maintains its dominance among the installed-base smart speaker providers in the United States.
Below is detailed information on the big market players as of June 2021 and their respective market shares.
- Amazon Echo – Amazon’s smart device captured 69% of the overall market during the period
- Google Home – Alphabet Inc’s smart device captured 25% of the overall market during the period
- Apple HomePod – Apple Inc’s smart device captured 5% of the overall market during the period
- Facebook Portal – Meta’s smart device captured 1% of the overall market during the period
Aside from the United States, the United Kingdom is also a big market for Amazon Echo, with 79% of smart speaker users reportedly using this device.
What Exactly is Amazon Echo?
Contrary to the hearsay, Amazon Echo is not just any other “glorified” radio.
This novel device acts as a virtual assistant aiming to make people’s lives better by performing tasks, from basic to complex, on their behalf.
Amazon Echo integrates the power of Alexa, Amazon’s cloud-based voice service, to receive and perform tasks as needed.
The two technologies use artificial intelligence and deep learning technology to understand commands.
According to its parent company, Amazon Echo can now perform an estimated 100,000 skills, thanks to years of experience which helped developers understand consumer needs better.
What are Users Using Amazon Echo for?
A survey shows the majority of Amazon Echo owners use it to listen to music.
Unlike a traditional speaker with limited AI capacities, the device’s Alexa integration helps it recognize songs through pieces of lyrics and tones, instead of requiring users to type a song title.
This enhances users’ overall experience.
Meanwhile, users make use of Alexa’s standalone features for various functions such as fact-checking, finding directions, looking up a business, researching a product or service, curating a shopping list, and online shopping, among others.
Is Amazon Echo Profitable?
Despite witnessing significant shipment growth over the years, Amazon Echo sales figures could not keep up with the high company spending to keep the product in the line.
The latest figures show Amazon’s device department, of which Amazon Echo and Alexa are a part, is on track to lose $10 billion this year.
This comes as voice-command technology is becoming a more unprofitable venture year after year, coupled with tougher competition against big market players like Apple Inc’s Siri.
Amazon Echo Devices
Amazon has released a good number of its smart speaker line in the past years.
Here are some that launched in the market so far, with others quickly reaching their end due to lack of market.
Amazon Echo Flagship Model
The Amazon Echo flagship model had launched in 2014 to selected Prime members. It did not become available to the general public until the following year.
Here are some of the versions of the flagship model:
- Amazon Echo first-gen
- Amazon Echo second-gen
- Amazon Echo third-gen
- Amazon Echo fourth-gen
Amazon Echo Plus
Amazon Echo Plus is the “premium” version of the standard, flagship Amazon Echo device which unfortunately did not hit success.
The company only released two versions, with the last coming in 2018.
- Amazon Echo Plus first-gen
- Amazon Echo Plus second-gen
Amazon Echo Dot
Finally realizing consumers’ need for a packable device, Amazon decided to launch the Amazon Echo Dot – the smallest version of its predecessors.
The Amazon Echo Dot is reminiscent of a small, round speaker that can be carried wherever.
The company released the latest version, the Echo Dot fifth-gen, this year.
Still, the Amazon Echo Dot third-gen is the best-seller among Amazon Echo devices of all time.
- Amazon Echo Dot first generation or first-gen
- Amazon Echo Dot second generation or second-gen
- Amazon Echo Dot third generation or third-gen
- Amazon Echo Dot fourth generation or fourth-gen
- Amazon Echo Dot fifth generation or fifth-gen
Amazon’s Presence in Leading Consumer Markets
Undeniably, Amazon is facing tougher competition with other e-commerce platforms.
Still, it maintained a strong presence in leading consumer markets, with the United States being home to its biggest consumer base in 2021.
- United States – the country contributed $314 billion to Amazon.com’s total annual sales during the year
- Germany – the country contributed $37.33 billion to Amazon.com’s total annual sales during the year
- United Kingdom – the country contributed $31.91 billion to Amazon.com’s total annual sales during the year
- Japan – the country contributed $23.07 billion to Amazon.com’s total annual sales during the year
- The rest of the world – contributed $63.50 billion to Amazon.com’s total annual sales during the year
In this day and age, all we want is automation. Having a device that can perform almost all tasks with great efficiency not only saves time but makes our lives easy.
With this, Amazon Echo sales figures skyrocketed over the years.
On the other hand, voice command is becoming obsolete and unprofitable lately as other tech companies offer the service for free.
Still, Amazon continues to seek ways to make Amazon Echo relevant, investing huge inputs of research and product development.