What you need to know
- Amazon is reportedly considering a paid tier for its Alexa voice assistant, which could cost between $5 and $10 per month.
- The new AI assistant could be called “Remarkable Alexa” and feature enhanced artificial intelligence-based features.
- Amazon would be joining the likes of Google, Microsoft, and OpenAI in asking consumers to pay a premium for AI software.
Artificial intelligence sparked a big period of investment in the technology following the release of OpenAI’s ChatGPT. Companies want to spend money on research and development for AI to appease investors wanting to know what they’re doing to capitalize on the industry‘s latest buzzword.
Now that the investment period has been underway for well over a year for many companies, there’s one thing left to do, and that’s monetize it. And if you’ve been following the tech industry lately, companies have a clear preference for monetizing AI through subscriptions.
OpenAI, Google, and Microsoft already have paid subscriptions that provide exclusive features to those that pay extra. All three companies also have free versions that anyone can access without paying a cent. In ChatGPT’s case, without even creating an account. However, these companies all think their subscription services provide enough value to justify the extra monthly cost.
Amazon might be joining that list this year, according to a report from Reuters last week. The outlet says they spoke to multiple people with knowledge of the matter, and they shared Amazon’s possible plans to charge for a future version of Alexa. Like many of the companies and services listed above, there‘s a free version of Alexa that can be accessed through the app and with Echo smart speakers and displays.
Once again, Amazon is hoping that this new version of Alexa — dubbed “Remarkable Alexa,“ per the report, and supercharged with AI — will be worth paying for. Reuters says that Remarkable Alexa would cost a minimum of $5, but it could cost $10. Interestingly, Amazon isn’t considering bundling Remarkable Alexa with Amazon Prime. The company has taken this approach in the past, choosing to raise the price of Prime and add features rather than create multiple subscription services.
We don’t know a lot about what Remarkable Alexa will look like, and it could never see the light of day. However, in a 2023 letter to shareholders, Amazon CEO Andy Jassy mentioned Alexa as it relates to generative AI.
”We’re building a substantial number of GenAI applications across every Amazon consumer business,” Jassy wrote. “These range from Rufus (our new, AI-powered shopping assistant), to an even more intelligent and capable Alexa, to advertising capabilities (making it simple with natural language prompts to generate, customize, and edit high-quality images, advertising copy, and videos), to customer and seller service productivity apps, to dozens of others.”
The report notes that Remarkable Alexa could order food for delivery or compose an email, which sounds a lot like what Rabbit tried (and failed) to do with the R1 and its large action model (LAM). Regardless of what this new version of Alexa looks like, it’s hard to see how or why people would pay a monthly fee for it.
Amazon could be making the wrong move
If Amazon does intend to proceed with this pricing model and strategy for Remarkable Alexa, it would be a big mistake. Google, Microsoft, and OpenAI all have niche features and top-of-the-line LLMs that justify the subscription costs for some users. Google has Android and Workspace integration, Microsoft has Windows and 365 integration, and OpenAI has the GPT Store and multimodal GPT-4o. For now, Amazon doesn’t have anything that comes close to those offerings, and Remarkable Alexa wouldn’t change that.
At the end of the day, Alexa is just a voice assistant. Amazon should be looking to what Apple is doing with Siri and Apple Intelligence instead of trying to mimic the subscription-based model of other companies. Apple isn’t charging for Apple Intelligence — every device that supports it will automatically get on-device processing, Private Cloud Compute processing, and ChatGPT outsourcing for free.
Apple isn’t charging for Apple Intelligence because it doesn’t need to. Apple Intelligence isn’t the product; the iPhone is the product — and all the AI features are just the means to the end, which is selling more iPhones. The same can be said about Apple Intelligence for iPad and Mac.
Amazon can and should copy this strategy. It could make Remarkable Alexa a truly competitive voice assistant with AI and use that to sell its own products. The company already has the Rufus chatbot to help users buy products on Amazon, and I’m sure that e-commerce will be a big part of Remarkable Alexa, too. But more than that, an enhanced Alexa could be paired with new hardware and Prime memberships to add value.
I’m never a fan of subscription price hikes, though I suspect Prime members would accept a $5 or $10 price increase because the plan still offers a lot of value. I’m not so sure how many Alexa users would pay that same $5 or $10 extra for a standalone Remarkable Alexa subscription.
Amazon is late to the AI party, and that comes with an advantage. It‘s starting to see what other companies have tried, what works, and what doesn’t. Microsoft, OpenAI, and Google have all tried paid subscriptions, and their free versions are still much more popular. Meanwhile, the early opinions on Apple Intelligence seem to be overwhelmingly positive.
I wouldn‘t pay for an Alexa subscription, no matter the price or what features were included. And for that matter, I can’t think of anyone who would.
