Report: Amazon to acquire Ring in deal valued at over $1B

Feb. 28, 2018
E-commerce giant adds video doorbell maker to its growing suite of home security products

According to multiple published reports, e-commerce giant Amazon has entered into an agreement to acquire video doorbell maker Ring. Although terms of the acquisition have not been officially disclosed, the deal is reportedly worth more than $1 billion. Amazon had previously invested in the company via its Alexa Fund.

Amazon has seemed to zero in on the do-it-yourself home security market as of late. Last October, the company made its official foray into the industry with the launch of its “Amazon Cloud Cam” and “Amazon Key” offerings. Amazon Key enables the company’s "Prime" customers to have packages dropped off inside their homes by granting remote access to delivery drivers. Cloud Cam is an intelligent indoor security camera that features 1080p resolution, night vision, two-way audio, a wide viewing angle, and activity clips from the last 24 hours via the Amazon Cloud Cam App. Those customers that want to use the Keys service must purchase the Amazon Key In-Home Kit, which includes the Cloud Cam and one of several compatible smart locks made by Yale and Kwikset.      

Just last month, Amazon also acquired wireless security camera startup Blink to further expand its footprint in the space.

Through both the Ring and Blink acquisitions, Amazon has not only added wireless cameras and video doorbells to its slate of home security products respectively, but also full home security systems. Prior to its acquisition, Blink had begun soliciting pre-orders for such as system with an option for professional monitoring on its website. Ring has also developed a professionally monitored home security system dubbed  “Ring Alarm” as well as a whole home security ecosystem featuring indoor/outdoor security cameras; and a line of smart, connected outdoor lights, called “Ring Beams,” which is a technology the company acquired when it bought LED lighting company Mr. Beams earlier this year.

Prior to acquiring Ring, Blake Kozak, Principal Analyst for Smart Home and Security Technology at IHS Markit, said that Amazon really only had bits and pieces of the home security puzzle. Even with the launch of Cloud Cam, Kozak said Amazon’s goal was never really about securing the home and it was certainly, in and of itself, not a viable competitor to professional security systems from the likes of ADT and Vivint. However, the suite of products that the company has access to now changes all of that.

“This will place added pressure on companies, such as Google, who also have these device types, but are priced much higher. This will also add pressure to professional service companies such as ADT who just partnered with Samsung for a DIY security system that can be professionally monitored,” Kozak said. “Overall, Amazon now has a more complete portfolio that could generate a spike in acceptance of the Amazon Key program.”

In addition, Kozak said Amazon’s purchase of Ring also points at a continuing trend in the smart home market in which companies are opting to expand their portfolio through acquisition rather than partnerships, which he expects to continue in the near term.

“Although partnerships will continue, this is a sign that the market is starting to see the need to have complete portfolios under one company/brand, rather than relying solely on integrations,” Kozak added. “As such, the back and forth between Amazon and Google continues. Perhaps next up could be Amazon releasing a high-end speaker to compete with Apple and Google Home Max (doubtful) or, more likely, Google will launch an Home version of the Echo Show or a Home that can directly control smart home devices through Z-Wave or ZigBee.”