Amazon’s Fall Devices: Invention and Brand Extension
Amazon Invents
Amazon is the undisputed champion of pushing technology boundaries when it comes to consumer devices and services, as it is largely unconstrained by legacy frameworks for its hardware innovation, and has a surprisingly robust culture of invention (“Invent and Simplify” is Amazon Leadership principle #3*). Other big tech firms are certainly innovative, but tend to have a narrower focus. Apple is iterating on existing hardware and software while it builds up health, AR, and transportation capabilities to bolt onto its ecosystem. Microsoft's Surface group invests in wild form factors, but these are still anchored to productivity and computing. Meta’s VR hardware is aimed at giving Facebook a platform to monetize without interference from Apple. Samsung is working on robotic kitchens in its labs, but its consumer products tend to be more conventional. Even Xiaomi, with its product launches featuring a dizzying array of new connected devices, tends to focus on building out home products – and its most innovative ecosystem products are often built by startups with an arms-length relationship to Xiaomi itself. The only real peer that Amazon has when it comes to spinning out unique hardware and globe-spanning initiatives is Google, and Google typically loses interest in its toys after playing with them for a little while.
Of course, not all Amazon products are blue sky efforts. Amazon builds plenty of iterative tablets, security cameras, and smart speakers that plug into its AI and content ecosystems, but Amazon also launches products that are far more experimental and, in their terms, “net new to the world.” Let’s start with those:
New Product Category: Amazon Glow
With most of the attention from Amazon’s Devices Event understandably focused on the Astro home robot (see below), the Amazon Glow flew somewhat under the radar. That’s a shame, because the Glow is likely to have a much bigger short-term impact, assuming that consumers can figure out what it is and why they should buy one. I tested an Amazon Glow with the help of Techsponential’s summer interns (my kids), and my eight-year-old absolutely loved it.
I tested an Amazon Glow with the help of Techsponential’s summer interns (my kids), and my eight-year-old absolutely loved it.
The Glow is a dedicated device for a child to connect and interact with people outside the home. The difference between a Glow and video chatting on FaceTime or Amazon’s Echo is the difference between asking your child how their day went (“fine”) vs. playing a game with them – you get much longer, richer interactions. The activities at launch include reading to (or with) your child, drawing, and various puzzles and games. Games with physical pieces are coming as well.
You only need one Glow for the child; the remote user can connect with most Apple and Android phones and tablets, including (but not limited to) Amazon’s own Fire HD tablets. The Glow itself looks a bit like an Echo Show mounted on a wide stalk. While it has a camera on top (that can be closed with a physical shutter), it deliberately does not have Alexa or always-listening microphones. This is a video communication device, but the “glow” in the name comes from a down-firing projector that turns an included mat into a touchscreen play area. I was skeptical about the technology here – projection keyboard gadgets use the same principles and are notoriously terrible. However, the Glow’s projection touch system works well enough for its intended purpose: manipulating puzzle pieces was sometimes challenging, but board games, drawing, and page turning on virtual books worked flawlessly.
The obvious market for this is grandparents, but parents who are deployed, travel frequently, or live separately from their child will also want one. Amazon includes a year of Kids+ content and full parental controls apply to it, which makes the Glow useful for a fairly wide age range (2 – 11 or so) beyond the included games and activities. When I sent the prototype back, my 8-year-old asked me to ensure that Amazon sends over a production unit when it launches, as he “needs to test it some more.”
New Product Category: Astro
Astro was Amazon’s response to a long term product planning exercise where everyone agreed that home robots are inevitable, so shouldn’t Amazon be building one? That decided, the question Amazon needed to answer is what should a home robot do, and how much is realistic. The team concluded that single-purpose robots, like vacuum cleaners, are not an ambitious enough target, but actively interacting with the environment adds so much complexity that it would not be achievable. As such, Astro’s MVP (Minimum Viable Product) concept is security and companionship, with healthy connections to Amazon’s Alexa AI – included, but not the primary interface – and Ring security system. Amazon has a separate industrial robotics division that automates its warehouses, but it turns out the consumer homes are very much unlike warehouses, so most of Astro was built from scratch.
Is a cute roving screen with a telescoping camera enough to entice gadget early adopters and seniors looking for a little tech help to age in place? Probably, though at $1,000, it will still look like a pricey rolling Echo Show to everyone else. The key will be what features Amazon adds next, and if companionship and friendly surveillance can form a durable base to build on for richer experiences.
New Product Line: Smart Thermostats
Amazon Smart Thermostat is a simple name for a relatively simple connected thermostat that works with Alexa. Nest kicked off the modern consumer IoT era with its thermostat back in 2011 and smart thermostats can be an anchor device that ties a household to a specific ecosystem, making it somewhat surprising that this is the first time Amazon has entered this category directly. There are multiple Alexa-compatible thermostats on the market, but Amazon is distinguishing its entry by not actually embedding a microphone in the unit (though it is selling Echo Spots alongside the Smart Thermostat in discounted bundles), leaving off many bells and whistles, and asking just $60.
Another curious aspect of the Amazon Smart Thermostat is that Amazon did not design the product it on its own. While Amazon clearly had a lot of input – it works with Alexa Hunches and it fits under Amazon’s “Certified for Humans” initiative – the core functionality comes from Resideo (aka Honeywell Home). It will be interesting to see if the Smart Thermostat supports the upcoming Matter standard, and how well Amazon and Resideo handle customer support. HVAC systems can be notoriously difficult, and even common problems like older homes that lack C Wires delivering power will require a Honeywell Home branded kit that does not come standard in the box – and may be beyond the skills of a DIYer to install.
New Product Line: Amazon Fire TVs
For years, financial analysts spread rumors that Apple was about to launch a television set. While those rumors never panned out, Amazon is now designing, branding, and selling Fire TV television sets. The truth is that Amazon has been designing white label televisions with its Fire TV interface software for years, sold under brands such as Toshiba and Best Buy’s house brand, Insignia. The new Fire TV lineup compliments these sets – and will sit next to them at Best Buy retail and on Amazon.com’s virtual shelves. The only difference now is that Amazon’s own product managers must choose the performance and price points to hit, and the sets will have Amazon’s own brand front and center.
There are two distinct classes in the Fire TV lineup, ranging from budget sets in 43” – 55” sizes to only slightly more feature-rich budget sets in 55” – 75” sizes. Those choices are solidly mainstream and match the most popular price points and sizes in the market (not a surprise, given Amazon’s access to sales data). However, they give Amazon little differentiation on the traditional shopping metrics – picture quality – or more recent features – gaming and audio. Samsung, LG, and Sony have nothing to worry about yet, and even value brands like TCL and HiSense should be able to compete by highlighting their panel and backlighting technology along with gaming features and soundbar bundles.
New Product Line (Sort of): Halo View
Sales of fitness bands and smartwatches soared during the pandemic, but Amazon was already Fitness bands have been one of the most successful wearable categories, but also one of the most competitive. Sales of fitness bands and smartwatches soared during the pandemic, and Amazon was ready to capitalize on this trend with the Halo service and Halo Band launched last August when initial lockdowns were starting to lift but gyms were often still closed. Amazon’s entry into the category was certainly differentiated, but also deeply weird. Sleep, heart rate, and activity tracking were standard for the category, but then Amazon added a microphone to track your tone of voice (even ignoring the obvious privacy issues, how is that measurement meaningful?). The Halo app has a useful-but-creepy body fat measurement system that uses AI to analyze pictures you take with your phone’s camera. Finally, the band itself provides no visual feedback, relying instead entirely on its companion smartphone app.
Amazon has not released sales figures on the original Halo, but it is following up a year later with a far more traditional product, the Halo View. While the original Halo looks like a narrow fabric sweatband, the $80 Halo View looks nearly identical to any number of other narrow fitness bands: a long rectangular display with a silicone band. The tone-of-voice tracking is gone, but the optional body fat measurement tool in the app remains. The normalization is good and bad; it should appeal to a much wider audience, but there is less separating it from Google’s Fitbit or even cheaper fitness trackers from Xiaomi and others.
Product Line Extensions:
Kindle – there is a new Paperwhite eReader with a larger display, adjustable color temperature, USB-C, and a new processor, but if you want physical page turn buttons, you need the top-of-the-line Kindle Oasis.
Echo – the Echo Show 15 is the first wall-mountable Echo with more family-messaging-centric functionality. The kitchen message center is a product idea that has been attempted many times over the past three decades; Amazon may finally achieve market success here by steadily iterating from smart speakers, to smart speakers with a display, to making that display more interactive.
Blink and Ring – Amazon is segmenting the market with Blink being its low-cost, low-power brand, and Ring providing the upmarket, higher resolution, feature-rich, and, frankly, experimental offerings. While it can be frustrating to analysts who are trying out different products and wish that Amazon would at least consolidate its subscription plans, setting up competing brands is a tried-and-true consumer goods strategy.
Blink is getting its own Video Doorbell, Floodlight Camera, and a Solar Panel Mount for Blink Outdoor cameras so they’ll never need their super-long-life batteries changed. The standout is the Video Doorbell, which can be used wired or on battery and hits an incredibly low $50 price point. Amazon may not make much money on the hardware, but this is a subscription revenue business, and likely quite profitable.
For its Ring line, Amazon is combining Ring with its eero home router brand in Ring Alarm Pro, which solves a major pain point of IoT security systems – poor WiFi coverage. The other connectivity bugaboo – dead WiFi due to power or broadband outages – is addressed with an optional Ring Protect Pro cellular data subscription. Amazon is working Rapid Response to add 24/7 monitoring and with Home Depot targeting Ring Alarm Pro at construction contractors.
Finally, last year Amazon announced a home security drone, the Ring Always Home Cam, that seemed a bit like science fiction. It will actually start shipping this year for $250.
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* “Think Big” is Amazon Leadership Principle #8. Combine them, and you get things like Amazon’s LEO satellite program and Sidewalk crowd-sourced neighborhood mesh network.