As a first approach, this strategy could make sense in a massive online retail market, when purchasing a popular gadget to sell to loyal customers. Roomba is a brilliant consumer product, with iRobot selling 40 million units over the past two decades. The device’s simple design and rotatability have given it a significant market share of $3 billion a year (just over $3 billion) — three quarters of all smart vacuum cleaners sold in the United States carry the name Roomba.
In this way, the deal makes sense. But the suspicion is that the deal for Amazon has nothing to do with cleaning the floors. What appears to be expanding the company’s reach even further into people’s lives would worry us all.
The power of Amazon’s monopoly goes like this: Amazon sales account for at least half of all online commerce in the US. Three out of four product searches start on the website. Amazon’s shipping and storage service delivers about a quarter of all e-commerce parcels in the United States and is poised to overtake UPS as the second-largest consumer parcel delivery company after the US Postal Service.
Amazon Web Services is by far the largest cloud computing company in the country. The Amazon Echo accounts for two-thirds of all smart speakers. The iRobot deal follows a well-known Amazon strategy that Jeff Bezos has admitted in the past: using mergers and acquisitions to control the market and increase Amazon’s dominant position.
Several companies make and sell robot vacuums, including brands like Shark and others, but Roomba is a household name even to those who don’t use their products, so ubiquitous that it serves as an abbreviation for all other robot vacuums available, such as the Tupperware brand is the name used to designate the containers in which food is kept in the refrigerator.
By simply acquiring the company that makes the most popular product in the industry, Amazon can increase its monopoly without having to innovate and compete with its competitors. It will then be able to use the dominant position by combining Roomba with its monopoly online market and Prime subscription program, which will suffocate other vacuum cleaner brands, fail to stand out and differentiate themselves from Roomba on the most popular retail site. the world.
Amazon used a range of anti-competitive strategies to gain a strong foothold in a wide variety of home technology products, all designed to mastery in smart home concept. The company often sells the Echo smart speakers at a loss, the Kindle, and even the Prime Video service to knock out rivals and extend its primacy. Amazon could use the same strategy with Roomba: combining its power in the retail market with prices below cost, destroying the deal before the competition.
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Amazon in our homes
This merger isn’t just about mastering the vacuum robot industry, or even smart home devices. Owning Roomba gives the manufacturer access to our homes and lives. You can map where we live, what we own and what you can sell to hundreds of millions of customers.
Amazon has taken the spotlight in domestic technology in the same way it is expanding now – by buying other companies. It bought voice assistant start-up Evi Technologies in 2013 to help create what would eventually become Alexa, the voice of Echo — by far the leading intelligent voice assistant.
To expand its eyes and ears into people’s homes, Amazon also bought two start-ups: camera maker Blink in 2017 and a doorbell company called Ring in 2018. Today, Ring represents about 40% of all video doorbells installed in the United States. .
These devices have given Amazon incredible access to people’s everyday lives. The company has a documented history of using data, which is being taken care of by its vast network of home technology, to grow and expand Amazon’s monopoly power. For example, Amazon has been using the Alexa algorithm for years to direct customers to Amazon’s own products. The ring monitors and records every interaction with the doorbell of a customer, including every doorbell and every closing movement outside the door.
Congressional investigators found that “the Ring and Blink acquisition was in part to expand and strengthen market power.” [da Amazon] for its other industries”.
Amazon’s search for consumer data raises deep and real concerns about how the company uses the sights and sounds captured by its in-home technology products. Amazon is working with police forces across America to install Ring video surveillance cameras on the streets, which are used to monitor people without any authorization.
And Amazon’s stock, how will they react?
The latest Roomba models capture information that Amazon does not currently have access to. iRobot’s new operating system maps the floor plan and contents of the spaces in which it operates. Vacuum cleaners are now equipped with a camera to respond to commands such as “Clean for the sofa”. But that means the vacuum cleaner knows what kind of sofa we have, whether it has a rug on it, and so on.
If the deal goes through, Amazon will know these things too and Amazon’s stock could have a significant valuation. Every bit of information Amazon collects about people’s lives—what they most want to buy, what questions they often ask, what they have in their house—raises the barrier to fair competition even further. Regulators will be looking at this deal, however, if they look at the deal from this point of view, Amazon may have to leave the floor cleaning to someone else and Amazon’s inventory could be corrected.
Amazon map (AMZN.US), D1 range. Amazon stocks broke the downward trend, which had been going on since November 2021, after the results on July 28. Amazon shares rose more than 13% in the aftermarket after the company posted revenue of $121.2 billion (mainly $119.1 billion) and expected revenues to reach $125-130 billion in the third quarter of 2022. amounts. Source: xStation 5
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