For several years, we have seen hundreds of smart home products trying to pave their way into our lives. Why are so many companies producing exactly the same products? Are smart products becoming a commodity? And if so: why does my apartment, and most of my friends’ apartments, only include a smart speaker and in the rarest of circumstances, a connected bulb, thermostat or camera. There seems to be a disconnect between smart home manufacturers and the general population. Then all of a sudden, you have Amazon coming into the connected home market to buy Ring and invest $61 million in Ecobee. What is Amazon trying to tell us?
Here’s my take: Amazon has identified a set of potentially successful products with clear value propositions and invested in modern versions of these products. Ring and Ecobee have a very clear and simple use cases and thus we’re more likely to adopt them. Combined with Amazon Key, Amazon can now access, monitor and control our home. If you add an Alexa speaker, you now are able to voice control all of this functionality.
Additionally, the availability of smart lock and video doorbell immediately allows Amazon to step into your home instead of stopping at your doorstep. This solves the last mile of the journey towards ultimate convenience. In fact, we already see Walmart and other retailers testing ways to bring produce and perishables directly into your fridge without you being there. Of course consumers can utilize their normal grocery stores’ digital ordering and delivery platforms, but Amazon is betting you’ll choose the convenience of voice-ordering your groceries from Whole Foods or Amazon Fresh and have them sitting in your fridge by the time you get home.
Still a bit weirded out by letting someone into your home without you being there? It’s understandable, but it’s the future. We’re already seeing these types of service-based companies expand into ‘while you’re out’ capabilities. The launch of Nest Doorbell, the Lighthouse AI-based camera, and Softbank’s investment in WAG all signal the direction we’re headed. Believe it or not, hundreds of thousands of consumers already allow people they don’t know to use a key and go into their house to walk their dogs, clean their homes or fix a broken widget without anyone there.
So we get what the immediate future looks like, but what’s Amazon’s master plan? The truth is: Ring is just the beginning. Currently, four companies are competing to establish which one is going to be the operating system of your home. It all starts with the brain – the hub that controls everything. It’s the way you communicate, direct and make purchases. In order to do this, the rest of your devices need to be speaking in the same language. The fight to be your home operating system is primarily being waged between Amazon, Google and Apple; with Samsung playing it safe with more flexibility.
Amazon, which failed with its operating system for the tablet trying to compete with Android and iOS, is not going to let this happen with your home. The first step was big – Amazon is subsidizing the price for the different Amazon devices and thus attempting to make choosing your system a very easy decision. The simple fact that this smart speaker connects to your music library or online music service provides an immediate use that every user understands.
But what’s an operating system without apps? A significant part of iOS success was the millions of compatible apps. You can look at the smart home market the exact same way. The more use cases and the more devices that will fit within your operating system, the more appealing it becomes. It might also make you commit to one of those systems and Amazon believes this is the way into your home. Not surprisingly, the platform already has tons of 3rd party devices and services that integrate with Alexa, making the experience that much better. Over time, we’ll see people will evolve their usage and ideally their spend with Amazon.
In a nutshell, Amazon wants to control your home and they’ve built the brain to do it - Alexa. With the purchase of Ring, Alexa now has eyes. With the Ecobee, Alexa now can feel. Amazon’s position is that the smarter Alexa gets, the more convenience she can bring to our lives. And of course the more we engage and the more integrated we become, we will inevitably spend more with Amazon. No matter how it plays out, we’re about to embark on a journey sparked by Apple, Amazon, Google and Samsung that will add unprecedented levels of service, convenience and entertainment to our lives. I can’t wait to see how it plays out.
About the author: Eyal Ronen is the CEO & co-founder of Puls, the rapid-response service for the ups and downs of digital life. Ronen is a seasoned executive and entrepreneur who founded Gotigo and CMate. He has extensive experience managing startups from inception to launch and growth.
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