Introduction to Alexa+

The only surprise in Amazon’s reveal of Alexa+ this week was the price, which has left many stunned. Given the current inflation and the numerous impactful subscription services available, the $20 per month price tag for an as-yet unproven AI chatbot seems absolutely absurd.

Historical Context of Virtual Assistants

Historically, Alexa has been free to use as long as you had the necessary hardware to run it. The same applies to Google Assistant and Apple’s Siri. These virtual assistants have always been designed to enhance the functionality of hardware, not to be a product in themselves.

The Pricing Strategy of Alexa+

What’s even more perplexing is that the $20 per month price for Alexa+ can be considered fake, akin to an inflated MSRP. This is evident when considering that a full Amazon Prime subscription, which includes Alexa+, costs $5 less per month. This disparity suggests that Amazon either values Alexa+ more than the entirety of Prime or is using the high price as a strategy to encourage people to join the Amazon ecosystem and purchase Echo hardware. Interestingly, this comes from a company that has faced accusations in the US and Europe for deceptive practices related to separating customers from their money.

Comparison with Other AI Services

In isolation, the $20 price for Alexa+ aligns with other premium AI services like OpenAI’s ChatGPT Plus and Google One’s Gemini Advanced plan. Amazon is indeed offering something unique by integrating a generative AI voice assistant with smart home capabilities, similar to what it did with the original Alexa. The feature to upload documents to Alexa+’s memory is also intriguing, although it raises concerns about data privacy, especially with Amazon being the custodian of that information. Despite these potential benefits, recommending Alexa+ at its current price is challenging, especially given Amazon’s mishandling of demos and limited journalist access during its presentation.

Expected Outcomes and Recommendations

It’s unlikely that Amazon expects a high volume of sign-ups at the $20 monthly price point. The strategy seems to be aimed at nudging more people towards Prime membership, potentially setting the stage for a future price increase for Prime. Given that it has been just over two years since the last Prime price hike, another increase is overdue.

Amazon will likely justify any price increase by pointing to the "increased value" of Prime, which is fair considering the array of services included. Alexa+, with its ability to create and order grocery lists through Amazon Fresh or Whole Foods, fits neatly into this framework. However, the propensity of vanilla Alexa to order goods from Amazon, sometimes without user intent, will continue.

Conclusion

Given the current economic climate, the best advice is to avoid this offer altogether. There are more entertaining or useful services available for your money. Options like Google’s Gemini Advanced plan, which comes with 2TB of Drive storage and other perks, or Xbox Game Pass, offer better value. Even subscribing to video-streaming services might be a more preferable way to spend your money, as they don’t serve as a direct portal to handing over more of your hard-earned cash to Amazon.