Amazon announced on Monday evening that it had acquired mesh-networking Wi-Fi company Eero for an undisclosed sum.
It gives Amazon yet another way into consumers' homes, as if the Amazon Echo, Fire TV, Key in-home delivery service and other products weren't enough.
What the heck is Eero?
Eero was a venture-backed start-up that sold mesh Wi-Fi networking systems through a wide variety of retailers, including Amazon and Best Buy.
It sounds boring, but if you've never used one, these sorts of systems are great. They allow you to spread WiFi all around your home instead of relying on a single Wi-Fi router and boosters to cover the whole house. If you have areas that never seem to get good coverage, a mesh Wi-Fi system can help solve that. Eero made it super simple to set up, too.
The competition in the space is pretty minimal. The biggest players aside from Eero are Netgear and Google Wi-Fi. In fact, one likely reason Amazon bought Eero was to stay ahead of Google, whose Google Home and Nest products provide Amazon's strongest competition for the connected home.
Other companies, such as Samsung and Belkin subsidiary Linksys, make them, too.
What will Amazon do with Eero?
Amazon could take several approaches with Eero.
The simplest would be to continue to operate an independent subsidiary under the Eero brand and allow the team to continue to introduce new products. Amazon acquired Ring — funnily enough, around this same time last year — which still operates under that name. But now Ring offers more than just a smart doorbell. It sells a home security system and introduced a slew of new gadgets that work with it at CES 2019. Eero could turn into another Amazon sub-brand like this.
Amazon could also start to build that tech into the Amazon Echo. A high-end Echo could double as a Wi-Fi hotspot, giving you increased coverage in every room you place one in.
Reliable Wi-Fi is important to Amazon's in-home strategy. Your Fire TV won't work well with 4K HDR content if you don't have a good connection. Its range of Ring products rely on constant and good internet to operate properly. And if Amazon ever introduces something like a home robot, that needs to have a connection no matter where it roams.
In the end, owning your home Wi-Fi might help Amazon make sure that all of its other products and services are operating as efficiently as possible.
It might also collect data about the devices in your home
Amazon could also use Eero to learn more about how people use internet connections in their homes.
I looked at the user terms for Google Wifi, a competing service, to see what Google uses the data for. It said it doesn't track websites or what you do online. Instead, it gathers data "such as Wi-Fi channel, signal strength, and device types that are relevant to optimize your WiFi performance." And it knows if you're using Google products, such as Google search or Gmail.
If Amazon collects device type information the way Google does, it could theoretically know all of the devices that connect to the internet in your home. It would know you have two iPhones, three iPads, a Fire TV and two Amazon Echos. As appliances get internet connections, too, it would know you have a washer, a dryer, and a fridge connected to the internet. Amazon and its partners are already building products like smart microwaves that know when you run out of food so they can order more.
The more Amazon knows about what people already own, the more efficient it can be at suggesting and selling products through Amazon.com — which is still the company's biggest business by far.