A smarter Alexa will reportedly cost you up to $10 per month

If you're a fan of Amazon's voice assistant Alexa, then there's news coming down the line – some good, some bad.

For starters, the company is said to be greatly enhancing the skills that Alexa offers. However, more negatively, there might be a price tag attached to it – and it could be a higher monthly fee than originally expected.

Whatever your perspective is, reports coming out of Amazon says it's a "must win" year for Alexa.

In September 2023, Amazon demoed a new version of Alexa at its devices launch at its headquarters in Arlington, Virginia. It was the same event that saw the launch of the latest Echo Show 8 and a collection of other devices.

That demo previewed a more conversational Alexa, with more personality and greater intelligence. There was talk of large language models and at the time it was clear that Amazon wanted Alexa to keep up with other AI services, like ChatGPT.

Ever since, there have been rumours that Amazon has been considering a subscription for the new Alexa experience. The then head of devices at Amazon – Dave Limp – said just after the event that a subscription was likely. Then we saw this referred to as Alexa Plus in January 2024 (along with a date of 30 June 2024) and more recently, reports that next-gen Alexa could cost you $10 a month.

The latest details from Reuters continue this line of thinking that a more enhanced version of Alexa will become a subscription product, while some of Alexa will continue as the free version it currently is. Reportedly, there's an internal deadline of August for the "new Alexa" – said to be codenamed  "Banyan".

How much will the new Alexa cost?

According to Reuters, the price for the smarter AI-powered Alexa will be "at least $5" a month, but the company is said to be considering a $10 a month price. That will allow more enhanced interactions, such as being able to order food by starting a conversation and controlling smart home devices without needing to setup Alexa Routines.

On one hand, Amazon is in a strong position. In May 2023 Amazon announced that it had sold over half a billion Alexa devices, providing a massive platform for any enhanced Alexa experience. But on the flip side, the value of an enhanced Alexa experience might be questioned – and getting people to pay extra could be a challenge.

Amazon has struggled to get Alexa to do what it was originally designed for – and that was to sell more products through Amazon's online store. Instead, Alexa has been described as a "colossal failure" according to a Business Insider report, losing money and seeing huge lay-offs on the team.

Amazon Echo, instead of selling more product, has been adopted as the centre of smart homes, it's used for timers, music and other information. Many people are happy with the experience and it still ranks as one of the best choices if you want a smart home.

To convince people to pay for an AI-powered version of Alexa, Amazon will need to demonstrate that it's substantially better. Because while ChatGPT is selling subscriptions to its AI solution, there's no indication that Google is going to charge for Gemini or that Apple is going to put a price tag on Apple Intelligence.

In the face of increased costs, customers might just stick with free Alexa, or switch to Google or Apple's solution instead.