Amazon is Building Out Its Smart Home Business
18 October 2022
In an earlier blogpost we wrote how we are moving from smart home 1.0, focused on automation, to smart home 2.0, where technology will move to the background so our homes can become ambient. Back then, we already mentioned Amazon as one of the companies creating a smart home ecosystem. With the planned $1.7 billion acquisition of iRobot, maker of the Roomba robot vacuum cleaners, Amazon is taking the next step in building out its smart home infrastructure.
Since Amazon introduced the Echo smart speaker in 2014, it has remained the biggest and fastest-growing player in the smart home market. After Amazon opened its voice-activation platform to outside developers in 2015, the number of Alexa-enabled products started skyrocketing. Today, 140,000 products are compatible with Alexa,1 of which the company owns only a few. Amazon acquired video doorbell maker Ring and security camera maker Blink in 2018. A year later, it bought Eero, a mesh Wi-Fi system to help connect multiple smart devices in the home, and in 2021, Amazon announced the introduction of home robot Astro.2
Now, the acquisition of iRobot may provide Amazon with a more comprehensive look at what is happening inside people’s homes. According to iRobot CEO Colin Angle, aside from its primary function as a floor-cleaning robot, Roomba also acts as a sophisticated mobile intelligence platform, complete with sensors and IoT-integration and connectivity. It will map the layout of the home, so it knows where it is and can move through the space with ultimate efficiency.3 He claims that iRobot’s vacuums would eventually be able to communicate with other devices around the home. “Roombas would act as roving security cameras, adjust room lighting based on where people are located, and control air purifiers based on environmental conditions.4 As such, the deal with iRobot fits within Amazon’s smart-home efforts that center around security and surveillance.
It also raises questions, however. Consumer advocacy organizations have raised concerns over Amazon’s increasing data collection and about what this will mean for privacy. Combined with other data sources, Amazon could wind up with a comprehensive look at what is happening inside people’s homes. The Federal Trade Commission has started an investigation into competition and whether the data generated about a consumer’s home by iRobot’s Roomba vacuum will give Amazon an unfair advantage over a wide variety of other retailers.5
Meanwhile, the question remains how other big players with the ability to build a smart home platform will respond. Google is already the second-largest smart home company in the US by device shipments (see graph). Aside from its home app and Google assistant, it owns smart thermostat Nest (acquired in 2014) and launched a range of Nest devices (including smart speakers and cameras). In 2021, it finalized the Fitbit acquisition.
Apple too has an opportunity. At this moment, Apple is one of the fastest-growing connected device companies in the world, with a 'shocking' 39% of households in the US, Europe, and Japan owning 10 or more Apple devices.6 Its Home app, however, could use some improvements. Will Amazon’s move give Apple and Google7 the impetus to build out their own ecosystems?
Amazon dominates the US market for smart home device shipments
Source: CNBC, 28 September 2022: video on Amazon's smart home dominance.
1 According to Amazon during its annual smart home event; https://www.cnbc.com/2022/09/28/amazon-dominates-the-smart-home-now-privacy-groups-oppose-irobot-deal.html.
2 https://www.theverge.com/2022/2/22/22945814/amazon-astro-home-robot-photo-video
3 https://www.linkedin.com/pulse/memo-smart-home-we-need-talk-colin-angle/
4 https://www.fastcompany.com/90776337/amazons-acquisition-of-irobot-is-a-profound-bummer
7 https://www.theverge.com/2022/10/4/23386287/google-home-app-design-update-matter-features
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