Amazon Developing More Hardware, Wearables and Home Gadgets
Amazon continues to be busy with its efforts in the hardware space with its Fire Phone running a modified version of Android dubbed Fire OS, its Fire tablets, Kindle tablets and other hardware to varying success. The Kindles continue to sell well and the Fire tablets have been well received (though with some grumbles that they were underpowered), but the Fire Phone largely fell flat with discounts in the Amazon U.S. store reducing the price down to as low as a 0.99c two months after launch when signing up for a 2 year contract.
Nevertheless, Amazon remains turbulent at the opportunities in front of them to provide hardware devices that are genuinely useful to their millions of customers. Their secretive Lab126 hardware development unit out in Silicon Valley which takes care of their hardware development around their e-readers is expected to grow from 3,000 employees to a significantly larger number over the next few years. Clearly this is one fight that Amazon isn't willing to give up any ground on.
The pricing of Amazon's own brand hardware has always been highly competitive. Some reports indicate that the company loses money on every unit sold but tries to make it up on customer satisfaction via the lifetime value of each customer and the streaming and other products they buy.
The tablets and phone links directly into the Amazon app eco system and their extensive library of streamable movies and TV episodes which creates just as much of a closed eco system as Apple customer contend with under the iOS operating system; a neat trick consider Android is generally considered Google's closed eco system.
Wearable devices is something that the retailer is looking into at present. There are many companies active in the space as well as the Apple Watch being released next year so Amazon is timing their entry into wearables quite carefully. It could potentially be a large market for them if they get it right.
Among the more interesting ideas being thrown around currently is a Wi-Fi device that could sit hidden in the closet or on a kitchen counter-top which is capable of placing a regular online order at the touch of a button. This technology could also be incorporated into wearables which Amazon also has a vested interest in. The FIRE button in Amazon hardware is well used and this continues this trend of simple interaction to resolve pain points for Amazon customers.
The entry into the home market with a Wi-Fi device could pit Amazon up against Google which acquired home security and product supplier Nest for $3 billion only a few months ago. Both the smart home concept and the Internet of Things model is alive with the largest online retailer in the world.
