It‘s no secret that Amazon has big ambitions in the smart home space. From its market-leading Alexa virtual assistant to its ever-expanding lineup of Echo smart speakers, the e-commerce giant has made the connected home a key strategic priority. But perhaps no single acquisition embodies Amazon‘s smart home push more than Ring, the smart doorbell pioneer it snapped up in 2018 for a cool $1.2 billion.
In the years since that blockbuster deal, Ring has become a household name and a symbol of Amazon‘s growing clout in the Internet of Things (IoT). But what exactly is the relationship between these two tech titans? How has Ring evolved under Amazon‘s stewardship, and what does the future hold for this smart home security juggernaut?
In this in-depth analysis, we‘ll explore the history of Ring, the strategy behind Amazon‘s acquisition, and what it all means for the rapidly evolving smart home market. We‘ll also take a critical look at some of the privacy and security implications of Amazon‘s expanding in-home footprint. So strap in as we embark on a deep dive into one of the most consequential corporate marriages in recent tech history.
Ring‘s Rapid Rise to Smart Home Stardom
To understand the significance of Amazon‘s Ring acquisition, it helps to start with the company‘s origin story. Ring was founded in 2013 by Jamie Siminoff, an entrepreneur and inventor who had previously dabbled in everything from telecommunications to wind energy. Siminoff came up with the idea for a smart doorbell after working in his garage and repeatedly missing visitors because he couldn‘t hear the doorbell. He envisioned a device that would allow homeowners to see and talk to whoever was at their door, even if they weren‘t home.
Siminoff initially launched the product under the name DoorBot, raising $364,000 through a crowdfunding campaign on Christie Street. He even took the concept to Shark Tank, the popular TV show where entrepreneurs pitch their ideas to celebrity investors. While the sharks ultimately passed on DoorBot, Siminoff used the publicity from the show to rebrand the product as Ring and keep building.
Over the next few years, Ring‘s business exploded. The company raised over $200 million in venture capital and saw its valuation soar to over $1 billion by 2017. According to data from NPD Group, Ring captured 97% of the video doorbell market in the US in 2016, selling over 1 million units. The company‘s revenue surged to $415 million in 2017, up from just $14 million two years prior.
Part of Ring‘s success stemmed from its relentless focus on customer experience. The company offered features like motion-activated alerts, two-way audio, and cloud video storage that gave users peace of mind and a sense of control over their homes. Ring also invested heavily in marketing and brand-building, with a memorable TV ad campaign featuring Shaquille O‘Neal and other celebrity endorsers.
But Ring‘s meteoric rise also made it an attractive acquisition target, particularly for a tech giant with designs on the burgeoning smart home market. Enter Amazon.
Why Amazon Rang the Doorbell
In February 2018, Amazon sent shockwaves through the tech world when it announced it would acquire Ring for over $1 billion, one of the largest deals in the company‘s history. The move instantly made Amazon a 500-pound gorilla in the home security space and signaled its intent to weave itself even deeper into consumers‘ domestic lives.
For Amazon, Ring checked several strategic boxes. Firstly, it gave the company a leading position in the fast-growing smart doorbell category, which was projected to be worth over $1.4 billion by 2023, according to a report by Statista. With Ring, Amazon could tap into the growing demand for connected home security solutions and cross-sell to its massive customer base.
Ring also fit neatly into Amazon‘s existing smart home ecosystem. Amazon had already made significant inroads with its Echo smart speakers and Alexa voice assistant, which it saw as a central hub for controlling various IoT devices around the home. By integrating Ring‘s cameras and doorbells with Alexa, Amazon could create a more seamless and intuitive smart home experience for users.
Perhaps most crucially, Ring gave Amazon a powerful new tool for tackling one of its biggest logistical challenges: package delivery. As the company‘s e-commerce empire has grown, so too has the problem of so-called "porch pirates" stealing deliveries left outside customers‘ homes. With Ring, Amazon could give customers a way to monitor and protect their packages, while also exploring new delivery options like in-home drop-off through its Key by Amazon program.
Of course, the Ring acquisition was not without risks. The deal instantly made Amazon a lightning rod for privacy advocates and civil liberties groups who worried about the company‘s ever-expanding surveillance capabilities. It also put Amazon in the awkward position of selling security cameras and monitoring services to consumers while also partnering with law enforcement agencies eager to tap into that video data for investigations.
Still, from a strategic standpoint, the rationale behind the Ring acquisition was clear. By bringing the company into the fold, Amazon was making a billion-dollar bet on the future of the smart home and its own place at the center of it.
Under Amazon‘s Ring: Growth and Growing Pains
Since joining the Amazon family, Ring has continued on its torrid growth trajectory. While Amazon does not disclose specific sales figures for Ring, analysts estimate that the company‘s revenue topped $1 billion in 2020, up from around $415 million in 2017. According to a report by Business Insider Intelligence, Ring now has over 10 million users globally and controls roughly 40% of the smart doorbell market.
This growth has allowed Ring to expand aggressively, both in terms of its product portfolio and its partnerships. The company now offers a full suite of smart home security devices, from indoor and outdoor cameras to alarm systems and smart lighting. It has also struck deals with major home builders like Lennar and insurance providers like State Farm to pre-install and subsidize Ring products in new homes and policies.
At the same time, Ring has doubled down on its integration with Amazon‘s other services and platforms. Ring doorbells and cameras now feature deep ties with Alexa, allowing users to view their camera feeds or arm their security system using voice commands. Ring has also become a key component of Amazon Key, the company‘s in-home delivery service, which allows couriers to drop packages inside users‘ homes or garages using a compatible smart lock and Ring camera.
However, Ring‘s breakneck expansion has not been without controversy. The company has faced mounting scrutiny over its privacy and security practices, particularly around its partnerships with law enforcement. Through its Neighbors app and law enforcement portal, Ring has built one of the largest private surveillance networks in the country, with over 2,000 police and fire departments participating. Critics argue that these partnerships lack transparency and accountability and could enable racial profiling and over-policing of marginalized communities.
Ring has also wrestled with a string of headline-grabbing security breaches and hacks. In late 2019, a spate of incidents saw malicious actors gaining unauthorized access to Ring cameras and using the two-way talk feature to harass and intimidate homeowners. While Ring blamed the hacks on users reusing compromised passwords, the episodes nevertheless dented the company‘s security-centric image.
Amazon, for its part, has stood by Ring throughout these controversies. In a 2020 letter to Congress, Amazon hardware chief Dave Limp defended the company‘s privacy and security measures, while acknowledging the need for greater transparency around its police partnerships. And despite the negative press, there‘s little evidence that the headlines have significantly dampened consumer demand for Ring‘s products.
The Ring‘s the Thing: Assessing Consumer Sentiment
So how do actual consumers feel about Ring and its growing presence in their homes and neighborhoods? The answer, as with many things in the smart home space, is complicated.
On the one hand, Ring enjoys strong customer loyalty and generally positive reviews for its core products. On Amazon.com, the Ring Video Doorbell has a 4.7-star rating based on over 100,000 reviews, with many users praising its ease of installation, video quality, and overall peace of mind. Professional reviewers have also given Ring high marks, with PCMag calling it "the best video doorbell you can buy."
However, dive into the reviews and you‘ll also find common complaints around connectivity issues, short battery life, and false alerts. Some users also express frustration with Ring‘s subscription model, which requires a monthly fee for features like cloud video storage and professional monitoring.
When it comes to Ring‘s privacy practices, consumer sentiment is more mixed. A 2019 PCMag survey found that while 36% of respondents had no concerns about Ring‘s police partnerships, 32% found them "extremely concerning." And a 2020 Consumer Reports study found that 40% of Americans who own smart home devices worry about their data being shared without permission.
Perhaps the best gauge of consumer attitudes toward Ring is how they vote with their wallets. By that metric, Amazon‘s big bet appears to be paying off handsomely. Despite the privacy backlash and occasional security snafus, Ring remains the dominant player in the video doorbell market and a rising star in Amazon‘s smart home stable.
Ringing Ahead: The Future of the Smart Home
Looking ahead, it‘s clear that Ring will remain a central pillar of Amazon‘s smart home strategy. As the company continues to push the boundaries of what‘s possible in the connected home, Ring‘s cameras and sensors will likely serve as the eyes and ears of that expansion.
One area where we can expect to see significant development is computer vision and AI. Ring has already begun deploying advanced features like facial recognition and motion-based alerts to its cameras. As these capabilities mature, Ring could offer even more sophisticated security and automation features, like real-time intruder detection or personalized access control based on who is at the door.
Ring is also well-positioned to ride the wave of new smart home technologies and standards, such as Matter, the upcoming open-source protocol backed by Amazon, Apple, Google, and others. As Matter gains adoption, Ring could become even more interoperable with third-party devices and platforms, making it a versatile tool for a wide range of smart home use cases.
At the same time, Amazon will have to navigate mounting regulatory and societal pressure around privacy and surveillance. As Ring‘s network of cameras and sensors expands, so too will concerns about the company‘s data practices and the potential for abuse. Amazon has already taken steps to give users more control over their data and limit its entanglements with law enforcement. But as the smart home becomes increasingly politicized, the company may need to go further to earn consumers‘ trust.
Ultimately, the story of Amazon and Ring is a microcosm of the broader smart home revolution. As our homes become more connected and automated, we are witnessing a fundamental shift in the nature of privacy, security, and domestic life itself. Amazon, through its ever-growing portfolio of smart home brands and services, is positioning itself to be the primary architect of that transformation.
Whether that is a reassuring or concerning prospect likely depends on your level of trust in Amazon and its stewardship of our data and our living spaces. What is clear is that, for better or worse, the smart home of the future will have Amazon‘s fingerprints all over it. And when someone rings your doorbell in that future, there‘s a good chance it will be a Ring.
