Amazon reportedly paid $90M for security camera company Blink
© Provided by CNET blink-doorbell-press-1080
Meet the Blink Video Doorbell, now owned by Amazon.
At the end of 2017, Amazon bought security startup Blink, which makes cameras and doorbells.
The acquisition reportedly cost Amazon about $90 million, Reuters said on Monday, citing people familiar with the matter.
The tech giant hopes to do more with the company than simply sell smart home cameras, under its brand, the site reported. Instead, it wants to use the chips exclusive to Blink to lower production costs and lengthen the battery life of other gadgets. This will start with the Amazon Cloud Cam, and eventually extend to its Echo speaker line.
Amazon did not immediately respond to a request for comment.
© Provided by CNET Meet the Blink Video Doorbell, now owned by Amazon.
With Blink’s camera chip and a few AA batteries, Amazon goes low-energy
Enlarge Blink reader comments 16 Share this story
At the end of 2017, Amazon quietly purchased Blink, a smart home security camera company known for its relatively affordable pricing and tiny, always-on camera modules. According to a Reuters report, Amazon didn’t just buy Blink for its security cameras—the online retailer reportedly bought the company for about $90 million to glean access to its energy-efficient chip technology that gives Blink cameras years of battery life.
Further Reading Blink review: Two cameras are almost always better than one
When news of the acquisition broke, most thought that Amazon would use Blink to enhance its own smart camera projects. Amazon launched Key just a few months prior to buying Blink, a system that uses Amazon’s own Cloud Cam and a smart lock to let couriers into homes to drop off packages.
The Amazon Cloud Cam needed for Key can also be purchased separately for basic home monitoring for $119, and it uses a microUSB port for power. On the flip side, Blink’s cameras are powered by AA batteries, and its embedded, energy-efficient chip allows those batteries to last up to two years at a time. Much like other smart home security cameras, Blink cameras record HD video, monitor motion, and send alerts to users when a disturbance is detected.
Blink’s security system is one of the most flexible available, thanks to its low price—a bundle of two cameras and a sync module costs $169—and untethered cameras. It’s clear why Amazon would want to tap into Blink’s chip technology: it could use those chips to extend the battery life of its own smart home security camera and any other IoT devices it debuts in the future. Battery life is a big concern for smart home devices, most of which require a constant source of power to work as promised. Having Blink’s chip technology under Amazon’s own roof could also lessen future dependence on chip manufacturers, lowering production costs and making it easier for the company to branch out into other smart home technologies.
Further Reading Amazon Key flaw makes entering your home undetected a possibility
Blink’s chip technology came from its owner, Immedia Semiconductor, which was started by ex-Broadcom employees in 2008. The group originally targeted the laptop industry with video conferencing chips, later switching to making its own cameras after laptop makers continued to buy more affordable chips from other suppliers.
Ars reached out to Blink for more information. The company still makes indoor and outdoor cameras under the Blink name (and it announced its first smart video doorbell at CES last month), and currently there are no signs of Amazon squashing Blink’s business in favor of its own. But Amazon’s smart home device business isn’t slowing down—last year, the company released a slew of new Echo devices in addition to the Cloud Cam and smart lock needed for Amazon Key access. It’s possible that, at the very least, we’ll see Blink cameras integrate more with Amazon devices and services in the future.
Amazon quietly dropped $90 million on a camera startup last year to acquire its unique chip technology
Amazon founder and CEO Jeff Bezos.Reuters/Lindsey Wasson
Amazon has bought camera-maker startup Blink for $90 million.
The takeover has had almost no coverage, but it actually took place almost two months ago.
The tech giant purchased the company primarily for the technology behind its energy-efficient chips, which it plans to reutilise in gadgets such as its Alexa-equipped Echo speakers.
Amazon paid about $90 million to acquire the maker of Blink home security cameras late last year, in a secret bet on the startup’s energy-efficient chips, people familiar with the matter told Reuters.
The deal’s rationale and price tag, previously unreported, underscore how Amazon aims to do more than sell another popular camera, as analysts had thought.
The online retailer is exploring chips exclusive to Blink that could lower production costs and lengthen the battery life of other gadgets, starting with Amazon’s Cloud Cam and potentially extending to its family of Echo speakers, one of the people said.
Amazon views its in-house devices as key to deepening its relationship with shoppers. The Cloud Cam and Echo currently need a plug-in power source to operate. Blink, which says its cameras can last two years on a single pair of AA lithium batteries, could change that.
Amazon declined to comment on the acquisition’s terms or strategy.
The deal so far has drawn little attention. The camera maker announced its takeover by Amazon with scant details in a Dec. 21 blog post.
Analysts have viewed Blink as part of the retailer’s strategy for Amazon Key, a new program where shoppers can set up a smart lock and surveillance camera so delivery personnel can slip packages inside their homes when they are away.
Amazon also sees opportunity in the security camera market as smart-home technology expands.
But Blink was not merely a camera business. Its little-known owner, Immedia Semiconductor, was started in Massachusetts by old hands from the chip industry.
Chief executive Peter Besen and two of his co-founders came from Sand Video, which had designed chips in the early 2000s that decoded a new and improved video standard.
In 2004 they sold Sand Video to Broadcom Ltd and remained there as executives, according to an Immedia website. The group left in 2008 to create Immedia, aiming to design chips for video conferencing, and later targeting laptop makers as potential customers.
Dan Grunberg, a co-founder who left Immedia in 2016, said that plan fell through. Laptop makers were unwilling to pay $1 per chip when cheaper options were on the market. So Immedia pivoted.
“If we make our own camera, we don’t have to sell a hundred million” chips, he said. Grunberg declined to discuss Immedia’s sale to Amazon.
The Blink security camera, which hit the market in 2016, did not require a power cable like many rival products, making it easier to place around users’ properties.
It was cheaper, too, starting at $99. Amazon’s wired Cloud Cam launched at $120, while Netgear Inc’s wire-free Arlo cost more still. Netgear said last week it plans to spin off its Arlo business.
“Battery life is a big issue in connected devices,” said Scott Jacobson, a former Amazon devices manager and now managing director of Madrona Venture Group. “Always-on cameras that last for months and don’t require a wired connection or an electrician to install could be game-changing.”
As Blink’s sales rose on Amazon’s website, the retailer took notice, sources said, leading to talks with the camera maker about a deal.
Flybridge Capital Partners, Comcast Ventures, Baker Capital, Dot Capital and some suppliers were investors in the company.
Amazon’s regulatory filings show it spent $78 million on acquisition activity in the quarter ended Dec. 31. Sources said the bid was competitive, and that compensation and incentives offered by Amazon pushed the deal’s value to about $90 million.
Madrona’s Jacobson, who had no knowledge of the acquisition’s details, speculated that Amazon might apply the Blink team’s expertise to cameras in drones or in its new checkout-free stores.
NOW WATCH: No one wants to host the Olympics anymore — will they go away?