Amazon to buy Eero to push into connected home market
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Amazon to buy Eero to push into connected home market

Ecommerce titan Amazon is looking to make a forceful push into the connected home space, boosting the impact of its home devices (like the Echo speaker, and Amazon’s virtual personal assistant Alexa) with a new purchase. That purchase is of WiFi-networking tool maker Eero, a start-up that is perfectly positioned to bolster Amazon’s connected home devices business.

Amazon’s share price has appreciated by 10% so far this year

13 feb ecomm graph

Source: Yahoo Finance

Eero is based in San Francisco, and it makes gadgets to boost WiFi coverage through the home. It does this by using a local networking technology (‘mesh’ technology) to smooth over hiccups in broadcasting internet signals. The result is a better-connected home – and it’s easy to see why that would appeal to Amazon.

Amazon is already the market leader in the home smart speaker market, and Alexa is becoming a member of families all over the world. For Amazon, she’s not just a product to sell, but a gateway into the company’s incredibly sticky ecosystem. That ecosystem includes Prime membership (free shipping and deep discounts across Amazon’s retail empire), Amazon Video (streaming video on demand), Amazon Music (a streaming music platform), and Twitch (streaming video games).

One area Amazon is looking to actively expand that ecosystem is into the physical home. The company is making a major play for market share in the nascent connected home market with products like a voice-controlled microwave and Fire TV streaming media sticks. Amazon’s also bought Ring, which builds video doorbells and home security tech. The possibilities are pretty clear: develop a comprehensive set of connected-home appliances, make them all function with one another and Amazon’s wider ecosystem, and use Eero as a built-in service to optimise performance… for example.

At press time, Amazon hasn’t disclosed the price tag for its latest purchase. But if it can further the company’s connected-home ambitions, it will certainly be worth whatever they paid.

Disclosure

Dominion holds Amazon in its Global Trends Ecommerce Fund.


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