Amazon’s biggest innovation is being cheap
As Amazon’s executives took the stage one after another yesterday to introduce the world to the company’s “next big leaps forward,” a sense of deja vu crept up on me. It only grew stronger as the event progressed, with many new Amazon products seeming incredibly familiar. The company has been criticized in the past for borrowing designs of popular goods and selling them for a lot cheaper.
That’s not an uncommon practice of course — massive retailers all over America like Walmart and Costco have offered lower-cost store-brand lines forever. But none of them stage flashy keynotes to tout their products as “innovations.” While Amazon has indeed brought certain unique technologies to the world in the past, this year the company’s “innovations” seemed to be more of it doing what it does best: undercutting the rest.
Halo View: Twinning with Fitbit
With the Halo View, Amazon is essentially adding a display to its existing screenless health-tracking band. But the View’s shape and style are so similar to Fitbit’s Charge series it’s hard to differentiate the two. Sure, there are only so many ways you can stick a rectangular display on a wristband, but Amazon’s mimicry doesn’t stop there. It also introduced new Halo Fitness and Halo Nutrition services today that will offer guides on working out and eating better.
That’s basically Fitbit Premium, which offers guides on working out and eating better. Oh and Fitbit’s $10-a-month service also provides tips on meditating and sleep. Amazon’s subscription costs just $4 per month after a trial period, though, and the $80 Halo View is $100 cheaper than the new Charge 5. The View probably won’t do as much as Fitbit’s trackers, which are quite sophisticated. Still, considering the price, Amazon will likely sell a lot of them.
Amazon Smart Thermostat: Lose the frills for a fraction of the price
Amazon teamed up with existing thermostat brand Honeywell to make a Smart Thermostat that will work with most existing 24V HVACs (most common for residential HVAC systems). You can control it with a separate Alexa-enabled device and set custom routines for heating and cooling. The company hasn’t released much more information about its thermostat yet, but from what we can see, the device has the rounded-rectangle shape of an ecobee smart thermostat with the color scheme of a Google Nest product.
Lots of existing smart thermostats by brands like ecobee, Sensibo and Google’s Nest do more things, but Amazon is seriously undercutting the competition by selling its version for just $60. The Nest Thermostat that was launched last year costs $130, while an ecobee 3 Lite goes for $170.
Blink cameras: Competing with Google for much cheaper
Competition in the security camera space is pretty stiff, so it isn’t very surprising that Amazon and Google both borrow a lot from each other. Amazon unveiled a new $50 Blink video doorbell camera today, alongside a set of outdoor cameras. One of these is the $40 floodlight camera mount that calls to mind Google’s Nest Cam with integrated floodlight. To be fair, though, Google did only introduce a wireless, battery-powered doorbell camera after Blink, so it appears the borrowing is mutual here.
The difference, however, is once again in pricing. Blink’s video doorbell is less than a third of the price of the $180 Nest Doorbell. Google’s floodlight-cum-security camera is $280, while Amazon’s mount (with a camera) is half that at $140.
But at what cost?
It’s no secret that Amazon’s business model has a lot to do with knowing what people want and changing their prices accordingly. But how can it make things so cheap? In addition to pure economies of scale and multiple reports of questionable (at best) labor practices, the company also offers goods at reduced prices in exchange for sticking ads on your devices. The ad-supported versions of Kindles and Fire tablets often go for $20 to $30 less than their stock counterparts.
With the breadth of devices Amazon offers, too, the sheer amount of data it could collect purely for the sake of selling you stuff is huge. With the smart thermostat, it could detect a dip in temperature in your region and suggest you buy from its in-house brand of winter wear. Or maybe your child’s been reading a book on a Kindle, and the company later serves ads for collectibles from that title on its new kid-centric Glow video-calling device. Or how about a subsidized version of the Astro robot that roams your house or follows you around with an ad on its face? Amazon also talked about a “vision of ambient intelligence” — which sounds very similar to the concept of “ambient computing” expounded by Google for years. But because Amazon’s products are so much cheaper, it could succeed at stuffing Alexa in so many more places in our lives.
Plus, with all the data it’s gathering from your shopping habits, whether it’s on one of its devices or the Amazon app, the company can afford to sell you something at a lower profit margin. The company said in its privacy notice that it’s “not in the business of selling our customers' personal information to others.” But it’s presumably using that data to understand the types of things you’re more likely to buy and put that stuff in front of you. It’ll probably make more off of you in the long run if you’re using the cheap Fire tablet to browse its store.
Of course, this doesn’t mean that everything Amazon unveiled today was a cutrate version of something else. We got an update on the Ring Always Home Cam, which was first announced last year. You’ll soon be able to sign up to test it out. The home security device is a little drone that can fly around your property at your command to see if anything’s amiss. No mainstream tech giant has launched something similar yet, though, so Amazon isn’t undercutting anyone on this.
Still, it seems like the company’s strategy for its flagship products is similar to that of its Basics line: Take a good idea, tweak it and sell it for loads cheaper. It’s not terrible; We could always use affordable, reliable devices. But Amazon is not innovating: It’s the Costco of consumer tech.
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As Amazon’s executives took the stage one after another yesterday to introduce the world to the company’s “next big leaps forward,” a sense of deja vu crept up on me. It only grew stronger as the event progressed, with many new Amazon products seeming incredibly familiar. The company has been…
