Amazon.com (AMZN +2.17%) has bigger goals than just controlling your door and access to your home. Yes, having that control does allow the company easier access to deliver packages, but retail and hard goods are only a piece of the puzzle for the company.
Ultimately, the online leader wants to use its Alexa artificial intelligence (AI) to control entire homes. It, of course, can do some of that already through its own products, including Amazon Cloud Cam. That device works with the company's Key program to allow it to open customers' doors to drop off packages.
Now, Amazon has made a deal to purchase Ring, a video doorbell and security company, for up to $1 billion. The move follows Amazon's purchase of Blink, another company operating the remote-controlled doorbell/door opening space.
Amazon wants to use Echo and Alexa to control your whole home. Image source: Amazon.com.
What is Amazon doing?
Amazon may be starting with the front door, but it has bigger visions. Ring already works with Alexa through Amazon's Echo line of smart speakers. In addition, Alexa can serve as a smart home hub working with a wide array of products.
The Blink and Ring deals give Amazon a toehold into products that can be more fully integrated into the Alexa/Echo family. Either through Ring, which will be run as a separate company (possibly with Blink folded in, though Amazon has not commented on that) or by making more purchases, the retailer can start to create its own range of smart products.
Ring makes video doorbells, security cameras, and associated products including floodlights. Blink has a similar lineup and also offers some home security products. It's easy to see Ring/Blink quickly advancing more deeply into home security, monitoring, and other safety concerns. From there, it's not a leap to imagine how Amazon could leverage its purchases into other connected home areas, including remote control of lights and appliances.
Is Amazon going its own way?
Just because the online retailer wants its own line of home products doesn't mean it will stop working with third parties. Amazon has its own line of tablets and e-readers but still makes the Kindle app available on any platform that wants it.
That's probably what's going to happen here. Amazon will use its acquisitions to create an affordable line of Alexa/Echo-optimized products at a low price point. That will still leave room at the top of the market or for companies offering more niche services.
Why is Amazon doing this?
If an Echo or other Alexa-powered device controls your home, it's also likely to be involved in your purchases. The future potential includes logical applications like smart appliances that order their own replacement parts to even smarter use-cases like an Echo-connect refrigerator that can order its own groceries.
Yes, Amazon wants access to your door. Being able to get into your house helps the company's current business model. The company's goals, however, go beyond that to effectively taking the human out of the purchasing process.
Your Alexa-powered home may someday know everything from when you need to order more eggs to when your washing machine needs a repair or your water filter needs to be replaced. That technology all exists. The Ring deal simply advances that agenda, giving Amazon another piece of what's likely to become a whole home platform.
