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- Amazon is debating a price point over $1,000 for its new Alexa home robot under development, code-named “Vesta,” according to people familiar with the matter.
- The high price tag would be a change for Amazon’s hardware strategy, which typically releases affordable products that are more commonly used.
- The Vesta team has been dealing with launch delays, leading to higher-than-usual turnover.
- Some employees are questioning the rationale behind investing in a niche device with little mainstream appeal.
- Visit Business Insider’s homepage for more stories.
Amazon’s next big disruptive product could come with a hefty price tag.
Amazon is debating a sales price exceeding $1,000 for its Alexa home robot that is under development, according to people familiar with the matter. At that price point, the yet-to-be-released home-roaming device, code-named “Vesta,” would become Amazon’s most expensive hardware product to date, targeting the higher-income demographic.
The premium market would be new territory for Amazon’s hardware business, which typically makes affordable products that appeal to more budget-conscious users. Most of Amazon’s hardware devices, including the popular Echo smart speaker, have been priced at about $100 or below to make them as widely available as possible. Even its most high-end Echo speaker, released last year, costs just $200, lower than Apple’s $300 HomePod.
The Vesta project, led by Gregg Zehr, the president of Amazon’s Lab126 hardware unit, is one of the top priorities and major investment areas for the company, these people said. Amazon CEO Jeff Bezos is also directly involved, making frequent trips to the Lab126 office in Sunnyvale, California.
But the Vesta team, which significantly expanded over the past two years, has faced constant launch delays that have partly sparked high turnover lately, people said. Internally, some employees are questioning why Amazon is investing in a niche product with little mainstream appeal at a time when the team needs to figure out how to monetize its wide user base.
An Amazon spokesperson declined to comment.
The Alexa-powered device is expected to be about waist-high and have the ability to move around the house on voice commands, the people familiar with the product said. One person described it as a “Roomba vacuum cleaner in human form” and said the basic idea was similar to a photo Bezos shared on Instagram two years ago, which shows the Echo speaker taped to iRobot’s Roomba. Bloomberg previously reported on the existence of the project.
The internal discussions are still fluid, and both the price point and the design could change as it nears launch, these people said. The price could drop, as the team is looking for ways to take advantage of existing technology from other parts of Amazon, like the Kiva warehouse robots it acquired in 2012. Further advances in Alexa’s voice technology could offset the need for a dedicated screen, which is being considered for the Vesta device, potentially leading to more cost cuts.
It’s unclear when the product will launch. Amazon’s hardware team usually holds an annual press event around September to showcase its newest gadgets, but it’s unlikely to reveal the Vesta product this year, people said.
Losing its luster?
Employees who spoke with Business Insider said the Vesta project has lost some of its luster internally after having attracted top engineering talent to the team over the past two years. The team has shown slow progress because of disagreements over the broader product strategy, leading to a longer-than-expected launch timeline and turning off people who had joined in anticipation of a faster market release.
These employees have questioned the rationale behind entering an unproven market with an expensive product that could stifle consumer adoption. Amazon’s hardware strategy has historically been focused on expanding its user base by adding the Alexa voice assistant to more commonly used products, like headsets or microwaves, at affordable prices.
The home-robot segment remains a niche market. Though it’s expected to grow into a $9.1 billion market by 2024, according to the research firm Markets and Markets, previous attempts by other tech giants, like Sony and SoftBank, have largely failed to gain much traction. The price range for other home robots in the market went as high as $3,000 for Sony’s robot dog Aibo to a few hundred dollars for Anki’s Vector.
In recent months, the Vesta team has faced “higher than average” employee departures, people familiar with the matter said. Some of the high-profile executives who have left in the past 18 months include: Aaron Bromberg, the former product lead who previously reported directly to Zehr; Christine Anderson, the former principal product manager; and Tiger Lan, an early director of the project who joined Facebook’s Portal in 2018. Max Paley, who helped develop the team’s computer-vision technology, also left in 2019.
While internal sales projections are low, Amazon could benefit from the launch of an expensive home-roaming robot, people said. For example, it could test the high-end market and see if there’s a willingness to buy pricier Alexa devices. Since the device is an amalgamation of the technology found in previous Alexa-powered devices, like computer vision and artificial intelligence, it could also help showcase Amazon’s technological prowess to competitors. The team is also hoping for a “trickle down” effect of inspiring other Alexa products in the home as well.
One person said the biggest benefit of releasing a home robot was data collection. A robot that moves around the entire home could help Amazon better understand home layouts and where voice commands are made most frequently within the household. But the privacy concerns over Alexa in recent years, including reports of the company monitoring certain user conversations, have caused the team to be much more wary of addressing those issues, this person said.
The Vesta project is led by a group of longtime Amazon hardware executives. Charlie Tritschler, an early member of the Kindle e-reader team, is one of the most high-profile vice presidents for the project, reporting straight to Zehr. Chris Green, the vice president of industrial design; Ken Kiraly, the chief technologist of Amazon digital products; and Gloria Whitaker-Daniels, a longtime Apple engineer, are also involved.