MarketWatch First Take: Amazon wants to control your entire house after Eero acquisition
Amazon.com Inc.’s plans to buy Eero is the latest in a string of deals by the e-commerce giant to become the eyes, ears and ultimate spy of all consumer behavior in your home.
Amazon AMZN, +0.18% said Monday it is buying Eero Inc., a startup founded in 2014 in San Francisco, for an undisclosed amount. Eero makes wireless routers and extenders that create a mesh network, providing better coverage for home Wi-Fi networks. The move follows Amazon’s 2018 acquisition of video-doorbell company Ring for more than $ 1 billion and security-camera company Blink in late 2017.
Amazon now appears to have the most connected devices for consumers who want so-called smart homes, where it is challenging fellow tech giants such as Google parent Alphabet Inc. GOOG, +0.00% GOOGL, -0.02% and iPhone maker Apple Inc. AAPL, -0.58% . The common element for those companies is a talking digital assistant that links all the devices together over a broadband network, which Amazon could effectively own in a home with Eero.
Dan Ives of Wedbush Securities said Monday that “Amazon is clearly in the catbird’s seat, followed by Google, and way down the list is Apple,” in terms of smart-home strength.
“Echo was the silver bullet of growth and we expect more consolidation in this space with Amazon, Apple, and Google going after this massive growth opportunity,” Ives said in an email, referencing Amazon’s Echo brand name for speakers powered by the all-hearing Alexa, Amazon’s artificial-intelligence-based talking assistant.
While investors may appreciate this move for Amazon because it solidifies its lead in an important consumer-tech category, consumers should be terrified. Amazon has faced criticism about how Alexa listens in people’s homes, and the company plans some pretty creepy new features for its smart-home system, including a Schlage deadbolt that operates just through Wi-Fi.
Amazon also includes Alexa on its Fire hardware devices and offers users non-stop reminders to set up Alexa for ordering products on Amazon or Whole Foods, or to even just check the weather. Some Eero customers are already scared that this deal will give Amazon access to all their internet traffic data.
Amazon makes a lot of money by learning as much about its users as possible so it can sell things to them. With that kind of business model, I wouldn’t trust the company to be a responsible steward of my networking gear. https://t.co/n9OnsX1SWQ
— Ben Hinc (@BenHinc) February 11, 2019
Indeed, with this deal, Amazon could be in a position to completely analyze everything you do on the internet, and send you relevant ads to entice you to buy more things on Amazon. Eero support however, responded to one concerned consumer with a tweet Monday, saying, “Eero does not track customers’ internet activity and this policy will not change with the acquisition.” Amazon and Eero did not immediately respond to requests for comment.
While it’s an astute business move for Amazon, consumers should think twice before giving one company so much control over their homes just for the sake of convenience.
Want this type of analysis sent to your inbox? Subscribe to MarketWatch’s free MarketWatch First Takes newsletter. Sign up here.