More than four years ago, an entrepreneur named Jamie Siminoff showed up on Shark Tank to pitch his idea called DoorBot. It was a smart doorbell with a camera that allowed users to see who is at the door on their smartphones whenever the doorbell rings. Though smart home products, especially those related to home security, were starting to take off in the U.S. at the time, the Shark Tank investors just didn’t see the opportunity for such a device.
This was a year before Amazon unveiled Alexa and its Echo smart speaker, which was a turning point for smart homes in ways many could not foresee. Like its competitors, Amazon is now looking to build out its Internet of Things ecosystem. To do that, it purchased Ring, formerly known as DoorBot, for $1 billion.
It’s somewhat poetic that Amazon would be the one to buy Ring after it helped create the future that made the Shark Tank investors’ assumptions so wrong. It’s not hard to see where people like Mark Cuban were coming from, though. Ring was not an obvious success. Even today, smart doorbells are not a big seller in the context of the entire smart home market, but Ring is the best-selling smart doorbell available. Siminoff entered a nascent, niche market, made the best product and and turned his startup into a $1 billion company.
Amazon’s ambitions in the smart home market might look ambitious, but they’re not so different from its competitors’ ambitions. Google acquired Nest in 2014 before more directly challenging Amazon by releasing Google Assistant in 2016. Apple just recently released its HomePod, but it doesn’t have much support for other smart home devices yet. Samsung has also said it would release a smart speaker this year based on the company’s own Bixby assistant.
Since the initial release of the Amazon Echo, Alexa has been put seemingly in everything, including power sockets, TVs and refrigerators. Alexa has also been getting better at controlling all kinds of other smart devices. This has become a primary reason for using Alexa, as it seems to be much better at this task than other digital assistants.
Yet Amazon has always had a bit of an Apple streak in its DNA, albeit for consumers with a more modest budget. The company likes to control the entire experience with its devices. In the smart home market, building out an entire ecosystem of devices can work if they’re affordable enough.
This is the approach Xiaomi has taken in China to great success. Though the company is still primarily known for its smartphones, it has branched out into all kinds of smart home products, including smart air filters and rice cookers. It’s even branched out into backpacks, furniture and other home items that aren’t smart at all.
This approach has allowed Xiaomi to become an affordable lifestyle brand for Chinese consumers. Amazon appears to be pursuing a similar model and it can now use the brick-and-mortar Whole Foods locations to sell those products since it acquired the supermarket chain last year.
So what does the future of the smart home market look like? It’s probably not consumers using products from one company that were bought in stores owned by one company and using cloud services from that very same company. At least for hardware, the market is too competitive for that.
Amazon and Xiaomi have shown that the ecosystem for smart home products is important. It’s important enough for Amazon to shell out $1 billion for the best smart doorbell on the market. Whereas a few years ago it was enough to make the best product in a niche category, startups now have a think about how their products work as part of something bigger. Support for as many standards and smart assistants as possible is a good place to start, even if Alexa and Google Assistant have products of their own that they prefer.
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