On Thursday, Amazon announced a slew of new products that either have Alexa included or it's compatible with. This included some first-party smart home appliances that have Alexa included. This marked the first time that Amazon has created any Alexa products that were not speakers of some sort (one could argue the Echo Show and Spot were not speakers, but they still kind of were). Amazon announced the AmazonBasics Microwave and the Smart Plug. And under the Ring brand, it announced two new Stick Up Cams, with one being wired and the other working off of a battery. This means that Amazon is no longer focusing solely on getting Alexa into your home, but getting you more devices to use with Alexa. This is the same thing that social media companies have been doing lately. It's not just trying to get you on its platform, but trying to get you to use the platform more, and that's what Amazon is doing with these three announcements from today's surprise hardware announcement.
Why the Push into Smart Home Products?
Amazon not only wants you to use Alexa to power your smart home, but it wants you to use its products in that smart home as well. Now Amazon already has a number of third-party smart home products that work with Alexa and are sold on its website. These include products from big names like TP-Link, Arlo, Philips Hue, LIFX and many more. But the reason for Amazon to get into the world of smart home products is, money. By making these products itself, it doesn't need to send a share of the profits over to its partner – which in the case of a TP-Link smart plug, that would be TP-Link. It also means that Amazon could push specific features to these products for Alexa, that competitors wouldn't have. We've seen this with third-party Alexa speakers. For instance, the Ultimate Ears BLAST speakers did not support some music streaming with Alexa, because that was being reserved for first-party Alexa speakers from Amazon.
With the AmazonBasics Microwave and Smart Plug, Amazon is also undercutting its competition, on pricing. For example, the AmazonBasics Microwave is priced at $59.99, that is very similar pricing to a regular microwave, without Alexa built-in. On the other hand, the Smart Plug being priced at $24.99 is actually cheaper than a lot of other smart plugs on the market. They usually are "on sale" when they hit that price point, but that is Amazon's regular price for the Smart Plug. This means that Amazon is likely either selling these at cost, or at a slight loss. Why? It's simple, Amazon wants more people using Alexa, and shopping on its store. Alexa is really just a window for shopping on Amazon, but it can also control your smart home, and what better way to sell more products then to release more smart home products that are cheaper than the competition. Most of Amazon's hardware is sold at cost or at a slight loss, as it is pushing a number of other services on the user, which makes up cost. Not to mention, Amazon does already sell a ton of products on its site, which more than make up the loss from selling Fire Tablets, Fire TVs, and other things.
New Amazon Echo's come along for the ride
Amazon also debuted some new Echo products at the event today in Seattle. Which included the Echo Dot (third generation) and Echo Plus (second generation). The Echo Plus is probably the more important speaker out of the two, especially in respect to smart home products. That is because the Echo Plus, similar to the first generation model, has a smart home hub built-in. It has Zigbee support built-in, so that if you have Zigbee-compatible devices, it can control them without needing a separate hub, which is a really good feature to have. The most common thing that people will use the Echo Plus to control, are Philips Hue bulbs, since they do work with Zigbee, and they do also need a hub to work. The Echo Plus also makes it super easy to setup, all you need to do is tell Amazon to search for smart home devices and it'll automatically connect and you'll be ready to control them in a matter of seconds.
What this means for third-party manufacturers
This likely won't mean much for third-party manufacturers making smart home products that work with Amazon Alexa, other than more competition. Which was going to happen, and has been happening for quite some time already. Now this could mean that Amazon will bring more features to Alexa for its own smart home products, that don't work with other smart home products, as we already mentioned. But that likely won't happen anytime soon. Of course, third-party manufacturers do have a slight leg up on Amazon here. Amazon's new products are not being advertised as compatible with the Google Assistant or Apple's Siri (or Microsoft Cortana, though there aren't many smart home products that work with Cortana). That shouldn't be a surprise, as Amazon wants you to use Alexa and not its competitors – there's also the case that Amazon and Google don't get along. But many of these third-party manufacturers are compatible with Amazon Alexa, Google Assistant and Apple Homekit/Siri, so that you can use them with your favorite voice assistant. That is going to be an advantage to some people that don't want to invest in an ecosystem of Echo devices.
It's good to see Amazon getting into the smart home space, more than just with smart speakers and displays. It was inevitable though, after it announced the Amazon Cloud Cam and Key products last year, and then acquired Ring earlier this year. Ring is well-known for its video doorbells and recently started releasing Stick Up Cams to go with the doorbells (two more were announced today), so while it wasn't a complete smart home company, it was getting there. And now Amazon has a number of products to help people get started. What's going to be interesting is to see how quickly these products become best-sellers. Given their price points, and the fact that Amazon is going to push them pretty hard, they will likely be best sellers within a month of their availability.