Alexa, will you ever make money?

Amazon needs to experiment with a strategy better suited to hardware, such as emulating Apple Inc.’s iPhone. It should focus on improving the technology and services around Echo and Alexa so consumers are willing to spend much more than cost price for the device, and for an upgrade every two years or so, just as they do with their smartphones.

In its first TV commercial for the product, Amazon teased how it hoped its smart assistant would make money. A woman speaks to the device in her kitchen and asks it to “add wrapping paper to the shopping list.” You can imagine from there that the shopping list could turn into actual orders made through Alexa. That makes sense in theory. Amazon is the world’s biggest e-commerce platform, and its digital assistant could be another helpful interface for its customers to do their shopping. At the very least, they could use it to re-order regular items like toilet paper or cleaning materials.

That idea never materialized because, of course, no one trusts Alexa to buy things for them. Stories abound of Alexa ordering things its owners don’t want. There’s the story of the six-year-old girl in Dallas, Texas who ordered cookies and a $170 dollhouse through the device when her parents weren’t around. A news reports about the incident, in which a TV anchor repeated the girl’s commands, ended up triggering more orders in households where Alexa heard the broadcast. More importantly though, consumers want to be sure their commands aren’t misinterpreted when money is at stake, which is why Amazon’s visual interface still wins out years after Alexa came on the scene.

The Echo’s other potential revenue stream has been to glean insights from people’s commands. But not only is that creepy from a privacy standpoint, there’s also not much valuable information to collect from people asking Alexa the time, weather or to set a timer.

The company may be gearing up to change its approach. Amazon made an unusual pivot in September 2021 when it launched a much more expensive, $1,500 home robot called Astro. (The Echo usually costs around $99.) If Amazon’s head of devices & services, David Limp, is gunning for higher-income consumers, that could spell a path to greater financial success for Alexa.

The company should flip its script even as it raises prices: Focus on streamlining its array of Echo speakers into a few sleek offerings that cost a few hundreds dollars more and which people are willing to pay to upgrade — and drop the astronomically-priced Astro, which doesn’t sport the same kind of utility as Alexa. The Echo itself is useful and much beloved by millions of consumers. Just don’t infringe on privacy to capitalize on the multitude of Alexa fans.

Amazon Chief Executive Officer Andrew Jassy cited Alexa as a unit that still has “big opportunities,” in a statement about company layoffs last week. That bodes well for its future — if Amazon can finally settle on a business model that works.