Amazon’s $1 Billion ‘Smart Doorbell’ Purchase
Amazon has paid $1 billion for ‘Ring’, a smart doorbell company, so that it can improve how it delivers parcels, and compete with Google and Apple in expanding the opportunities for their digital assistants and app ecosystems.
What Is Ring?
Ring, run by CEO Jamie Siminoff, is a US company that primarily manufactures ‘smart doorbells’. These doorbells work by recording live videos of customers’ doorsteps, then sending the videos to their smartphones.
There are obvious security benefits for customers from an innovative IoT product of this kind. In this case however, there is also a big benefit for Amazon in helping its customers trust its new service which allows couriers open people’s front doors and put deliveries inside. The new service, which was first announced in October last year, requires a leap of faith from customers, as they have to trust couriers to enter their premises unaccompanied to deliver parcels (while being filmed).
In the original plans for the service, smart locks and Cloud Cam cameras were to be used to monitor couriers who would scan a package barcode outside the door, and once the delivery has been verified online, the camera would record the delivery person unlock the door (using an app) and making the delivery. The purchase of ‘Ring’ enables Amazon to acquire the system to operate this service effectively in the marketplace very soon.
Part Of A Bigger Battle
The purchase of Ring for $1 billion is further serious evidence of Amazon competing with multiple rivals for all aspects of our homes, and invariably, our business premises.
For example, back in September 2017, Nest (owned by Alphabet / Google) released an internet-connected intruder alarm, a video-streaming doorbell, and a door lock system that was developed in collaboration with Yale. Nest has also just announced that it will be incorporating Google Assistant into its products so that they will work with Google Home.
It is, therefore, not just the lure of the lucrative and growing smart home security market that Amazon has been interested in, but also the competition among the big players – Google, Apple and Amazon – to link up their digital assistants with many different smart home devices e.g. to control the lighting, heating, and now the security.
What Does This Mean For Your Business?
Many businesses receive frequent parcel deliveries during the day, and this type of service may, therefore, be a useful one (particularly for smaller businesses), and could minimise disruption and help efficiency. Amazon has the parcel delivery network, the services e.g. Amazon Business (its online trade counter), and now its point of delivery security system.
This product is an example of how multiple technologies have linked together to provide another new business opportunity in a new and growing market. Some critics have, however, pointed out that this service requires some serious faith and trust from customers, and that it would only take a few incidents to kill that trust and to force the expensive idea onto the back burner. There is still, of course, the broader, general problem of IoT security, which has not been fully addressed in many other products, and could still prove to be the Achilles Heel in this one.
This story is also an example of how Amazon is expanding and diversifying into many different aspects of our home and business lives e.g. parcel delivery, groceries, and now smart security. The story is also an example of how the big home digital assistant manufacturers are now locked in competition to expand the number of products and services that link up to their devices e.g. Amazon Echo, and this market could provide many business opportunities for many other tech companies and manufacturers in the along the way.