- Amazon’s acquisition of mesh Wi-Fi router startup Eero marks yet another effort by the retail giant to integrate its products and services into the home.
- It follows other recent acquisitions that suggest Amazon wants to embed itself in every corner of the home, such as its purchase of video doorbell maker Ring and upscale grocery chain Whole Foods.
- The deal also indicates that it’s getting even more difficult to purchase or use technology that isn’t run by the "big five" tech companies: Google, Amazon, Apple, Microsoft and Facebook.
Over the past several years, Amazon’s Alexa virtual assistant has made its way to nearly every corner of the home —from smart microwaves to wall clocks, washing machines and televisions. Now, with its latest acquisition of mesh Wi-Fi router startup Eero, Amazon is further cementing its presence in the home.
Amazon and Eero announced on Monday that the two companies have entered into a merger agreement under which the online retail giant will acquire the Wi-Fi startup, although terms of the deal have not been disclosed. The announcement didn’t include any details about how or if Amazon plans to integrate Eero’s technology or devices into its own products at any capacity. But Dave Limp, Amazon’s senior vice president of Amazon Devices and Services, said in a press release that the two companies “have a shared vision that the smart home experience can get even easier.” Business Insider has reached out to Amazon for comment on more details regarding the deal and will update this story accordingly when we hear back.
The move makes sense for Amazon, which has emerged as a dominant player in the smart home space in recent years thanks to the popularity of its Amazon Echo devices. Limp recently told The Verge that more than 100 million devices with Amazon’s Alexa assistant have been sold to date following the Echo’s initial launch in late 2014. It’s unclear exactly how that compares to Amazon’s primary competitor Google, but the search giant recently said that it expected Google Assistant to be available on 1 billion devices by the end of January 2019.
Neither Amazon nor Eero have specified exactly what the deal means for either company’s current or future products, but it’s easy to imagine how having control over the Wi-Fi experience could benefit Amazon. The company has already been thinking about ways to simplify the process of connecting its Echo devices to other Internet-connected appliances, as evidenced by the Echo Plus device it introduced in September 2017. The Echo Plus has a built in smart home hub that makes it possible to connect compatible products by simply saying “Alexa, discover my devices” rather than going through the traditional set-up experience. With its acquisition of Eero, Amazon is no longer just a purveyor of smart home devices; it owns a part of the experience that’s crucial to making them all work. It wouldn’t be surprising to see Amazon leverage Eero’s products in a way that makes setting up Wi-Fi-powered smart home appliances more seamless.
In addition to the potential this acquisition has to bolster Amazon’s foothold in the home, it also gives the company another option for subscription revenue outside of its $119-per-year Prime service, which 62% of Amazon members pay for according to Consumer Intelligence Research Partners. Eero sells a $99-per-year Plus subscription that offers ad blocking, threat detection, and family-safe browsing options. While neither Amazon nor Eero has given an indication that there will be any changes to this service given Amazon’s new ownership, it’s worth noting that the online retailer began offering Whole Foods discounts for Prime members after it acquired the supermarket in 2017 for $13.7 billion. (A new report from The Wall Street Journal, however, indicates that may no longer be the case).
The Eero deal is the latest in a string of acquisitions that puts Amazon in nearly every corner of the home, from the kitchen to the front door. Last February news broke that Amazon would acquire video doorbell maker Ring for $1 billion in a move that was largely perceived as a means of furthering its dominance in the smart home and retail spaces. Before that, Amazon acquired Whole Foods, giving it a pipeline into consumers’ kitchens.
Amazon’s acquisition of Eero also provides the online shopping giant with a crucial piece of the smart home market that could prove necessary for maintaining its status as a leader in smart home technology. Both Google and Samsung, arguably Amazon’s biggest rivals in the space, have long offered their own mesh Wi-Fi routers that work with their own respective smartphone apps. Through these apps, users can view connected devices, block certain websites and manage other features.
As such, this deal also raises a concern that’s been brewing in recent years about whether companies like Amazon, Google, Apple, Microsoft and Facebook hold too much power over our digital lives. For example, six out of the 10 most downloaded iPhone apps of 2018 are operated by Facebook and Google. Google’s Android and Apple’s iOS operating systems dominate the smartphone market, with Android accounting for 85.1% of the market and iOS claiming 14.8% according to a report from the International Data Corporation published in December 2018. Acquisitions like this only make it more difficult to purchase or use technology that isn’t made or operated by one of the so-called “big five,” further fueling the conversation about whether firms like Apple, Google, Amazon, Microsoft and Facebook are becoming too powerful.
The acquisition also comes amidst rising privacy concerns over how large tech companies, particularly Facebook, are using the data they collect. Apple recently revoked multiple enterprise certificates from Facebook after TechCrunch reported that Facebook had been using Apple’s Enterprise Developer Program to distribute an app that gathered data from the recipient’s phones in exchange for payment. Before that in August, Apple banned the Facebook-owned Onavo internet security app because it broke the iPhone maker’s data collection rules since it monitors app activity.
For those worried about whether the acquisition would give Amazon a window into Eero users’ Internet activity, Eero’s support account on Twitter issued the following response:
It’s too soon to tell how the acquisition will impact products made by Amazon and Eero if at all. But it’s yet another sign indicating Amazon will only become more ubiquitous in the home.
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Source: Business Insider