Here's How Amazon Is Dominating the Internet of Things

The Internet of Things (IoT) is a rapidly growing market that’s on track to be worth $745 billion this year, and is projected to surpass $1 trillion in 2022, according to the analysts at IDC. An ever-increasing array of devices, services, and industrial equipment — think jet engines, manufacturing equipment, farming equipment, and more — is being connected to the Internet, allowing companies to acquire and track data they never had access to before, and automate previously manual systems.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="But the IoT is more than just an industrial sector story — it has planted itself firmly within the consumer space as well, thanks in part to Amazon.com (NASDAQ: AMZN). The company’s Alexa digital assistant is being integrated into more and more devices, allowing them to be controlled via voice commands. At the same time, Amazon is getting its smart devices into more homes, and integrating more IoT support into Amazon Web Services (AWS). All of that is combining to give the company a dominant position in IoT.” data-reactid=”12″>But the IoT is more than just an industrial sector story — it has planted itself firmly within the consumer space as well, thanks in part to Amazon.com (NASDAQ: AMZN). The company’s Alexa digital assistant is being integrated into more and more devices, allowing them to be controlled via voice commands. At the same time, Amazon is getting its smart devices into more homes, and integrating more IoT support into Amazon Web Services (AWS). All of that is combining to give the company a dominant position in IoT.

To get a better perspective on Amazon’s IoT influence, let’s consider what the company is doing with smart speakers, smart home connections, and AWS.

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Image source: Getty Images.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Smart speakers” data-reactid=”26″>Smart speakers

Amazon’s Echo devices are most popular smart speakers on the market, with a 61% share. For reference, the second-place Google Home line, which has been gaining a bit of ground, only has a 24% share of the market. But Amazon is interested in much more than device sales here.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The company doesn't make much profit from selling its Echoes — and often uses them as loss leaders — but rather looks to the&nbsp;devices as long-term drivers of business for its e-commerce platform. On average, people with Echo smart speakers in their homes spent about $1,700 on Amazon.com in 2017, $700 more per year than the average Amazon shopper, and $400 more than the average Prime member, according to Consumer Intelligence Research Partners.” data-reactid=”28″>The company doesn’t make much profit from selling its Echoes — and often uses them as loss leaders — but rather looks to the devices as long-term drivers of business for its e-commerce platform. On average, people with Echo smart speakers in their homes spent about $1,700 on Amazon.com in 2017, $700 more per year than the average Amazon shopper, and $400 more than the average Prime member, according to Consumer Intelligence Research Partners.

The key factor is how easy it is for consumers to ask Amazon’s voice-controlled digital assistant, Alexa, to order new products or reorder items that they’ve purchased in the past.

With Amazon’s early lead in the smart speaker space, plus the benefits it accrues from Echo owners spending more on its e-commerce platform, it is perfectly poised to grow along with the expanding smart speaker market.

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Home integration” data-reactid=”31″>Home integration

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Amazon has worked hard in the past few years to expand its presence in our homes beyond smart speakers. For example, the company in April introduced a service called Key for Garage — a smart garage-door opener that allows delivery drivers to leave packages securely inside customers’ garages. It’s the most recent extension of the company’s Key services, which allow monitored delivery people to leave packages inside customers’ homes or the trunks of their cars.” data-reactid=”32″>Amazon has worked hard in the past few years to expand its presence in our homes beyond smart speakers. For example, the company in April introduced a service called Key for Garage — a smart garage-door opener that allows delivery drivers to leave packages securely inside customers’ garages. It’s the most recent extension of the company’s Key services, which allow monitored delivery people to leave packages inside customers’ homes or the trunks of their cars.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="And then there's the&nbsp;TurnKey service it announced in July: Amazon (in partnership with Realogy) will help would-be home buyers connect with top real estate agents. Then, once a TurnKey customer buys a house, Amazon will send them some of its smart home devices, like an Echo speaker and Ring doorbell, as well as a credit toward home services.” data-reactid=”33″>And then there’s the TurnKey service it announced in July: Amazon (in partnership with Realogy) will help would-be home buyers connect with top real estate agents. Then, once a TurnKey customer buys a house, Amazon will send them some of its smart home devices, like an Echo speaker and Ring doorbell, as well as a credit toward home services.

The goal here, too, is for Amazon to get more of its devices inside our homes, smoothing the path toward additional e-commerce sales and making it easier for it to offer us new services in the future.

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