Amazon.com, Inc. (NASDAQ:AMZN) and Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) have been battling on the smart home front for several years now. They compete with streaming media players and most recently smart speakers. And now they’re going to be going head-to-head in home security, with the new Amazon Cloud Cam taking on Alphabet’s Nest Cam series and Nest Aware cloud service.
Yesterday, AMZN announced the new Amazon Cloud Cam. Amazon’s new indoor security camera offers 1080p Full HD resolution, night vision, two-way audio and a wide viewing angle.
Owners can keep a remote eye on their home using a free app for Apple Inc.’s (NASDAQ:AAPL) iPhone and Android.
AMZN Announces Amazon Cloud Cam
Naturally, the Amazon Cloud Cam features Alexa integration. Amazon’s personal assistant can be used from an Echo Show, Echo Spot, Fire tablet or Fire TV device to display a feed from the security camera using a voice command.
Video clips — triggered by motion — are stored on Amazon’s AWS for 24 hours, with notifications of the detected activity sent to an owner’s mobile device. Amazon says that with AWS powering the Cloud Cam, it is always getting smarter, so you should expect false alerts to be minimal.
AMZN is pricing the Amazon Cloud Cam at $119.99, but also selling discounted bundles. A two-pack is $199.99 and three go for $289.99, bringing the cameras to under $100 a piece. The company is also offering bundles with an Echo Show speaker, or with a smart lock (more on that in a moment).
While the Amazon Cloud Cam is a fully functional security camera on its own, AMZN is also offering a three-tired subscription service that unlocks additional capabilities. With a subscription, AWS machine learning is put to use to detect human motion, specific areas of the home can be ignored, owners get additional storage and extended access to clips and more cameras can be supported (up to 10 for the highest tier). The company is pricing the subscriptions at $69, $99 and $199 per year.
Yesterday, Amazon also announced Amazon Key. This service works with an Amazon Cloud Cam and a supported smart lock — which AMZN will gladly sell you — to support free in-home delivery for Amazon Prime members. With Amazon Key, customers get a notification a delivery is expected, the Amazon Logistics driver gets a code that unlocks the smart lock, the package is placed inside the buyer’s home and the Amazon Cloud Cam is filming the drop-off.
Amazon Cloud Cam Takes on Nest
Amazon and Alphabet have been wresting over control of the smart home. It started in the living room with the Fire TV taking on Google’s Chromecast. Then Amazon snuck into a dominant position as a smart home hub with its Echo line of smart speakers. Alphabet countered with the Google Home smart speaker.
Now AMZN is going after one of Alphabet’s other smart home offerings by taking on Nest. The Nest Cam Indoor has similar functionality to the Amazon Cloud Cam, but costs $199, or $497 for a 3-pack. Nest Aware, the AI-powered subscription service that unlocks additional capabilities and cloud storage for the security cameras starts at $100-per-year and goes up to $300-per-year.
In other words, AMZN is not only stepping on Alphabet’s territory with the Amazon Cloud Cam, it is significantly undercutting the competition on pricing. And throwing in the perk of Amazon Key to make the system even more enticing to Amazon Prime members.
Will the Amazon Cloud Cam have an impact on AMZN stock? Like most of Amazon’s hardware, the company is probably not making much profit on it.
But the security camera service contributes to locking customers into the Amazon ecosphere and Amazon Key may just convince more people to sign up for Amazon Prime. Subscription revenue from the Cloud Cam will add to that generated by services like Amazon Prime and Amazon Music Unlimited. This growing, predictable revenue stream benefits AMZN stock because it isn’t subject to the peaks and drops of new product launches and retail sales.
The Amazon Cloud Cam is available for pre-order now, with shipping starting Nov. 8. Amazon Key launches on Nov. 8 in the 37 U.S. cities where Amazon Logistics currently delivers.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.