On February 27, 2018, Amazon announced it would acquire Ring for an undisclosed amount.
Ring is the maker of Wi-Fi video doorbells that alert homeowners when someone pushes the doorbell or motion is detected. Ring also recently relaunched its Ring Alarm system, following litigation by ADT. Moreover, Ring made an acquisition of its own in January, Mr. Beams, a maker of LED lighting.
This acquisition by Amazon makes it the second-largest smart home device company in the Americas region, second only to Nest. This market share is made up mostly of Amazon's smart speakers, estimated to have an installed base of about 19 million at the end of 2017 in the North American region.
Ring was estimated to be the market leader for video doorbells, with a share of about 45 percent of the Americas region in 2017, which equates to an installed base exceeding 1.2 million video doorbells.
This acquisition by Amazon increases its presence in the residential security market, which will greatly enhance the Amazon Key program that allows in-home deliveries. Amazon already launched its own indoor camera in October 2017 and then acquired Blink in December 2017, which gave the company access to the outdoor space. Ring will also give Amazon supplementary access to the outdoor space through video doorbells, outdoor cameras and outdoor lighting.
The acquisition also fits well into the pricing strategy of Amazon, which comes in below much of the competition. Although Ring doorbells and cameras are not low-tier pricing, the monthly security monitoring and security devices (Ring Alarm) are well under the industry average. Paired with the Blink low-cost camera, consumers can get a security system for much less than the competition. While there are other options for video doorbells that could have been acquired by Amazon, Ring is the most consumer-facing choice, with SkyBell being the primary selection for professionally installed security.
Lastly, the Echo Show, Echo Spot and Fire TV Stick likely permit a more seamless experience for viewing video on a screen, other than a mobile device. For instance, a consumer could ask the Echo show to “show me the front door.” Although this type of integration is already available for these Echo products, the response time is often delayed, derailing the consumer experience. As such, Amazon could also look to expand Ring Neighborhoods, which alerts nearby Ring users of suspicious activity, helping to reduce package theft.
Overall, Amazon is now in a unique position given that it has a security system, smart speaker and video surveillance as well as locks that work exclusively for Amazon Key. Amazon also has close relationships with smart thermostat makers such as Ecobee, where Alexa is built into each accessory sensor and the thermostat itself. This means consumers can now rely on Amazon for smart home (Echo Plus), security (Ring+Blink), smart speaker and entertainment (Amazon Prime Video), situating the company in a unique position in the smart home market.