Why did Amazon pay $90m to acquire Blink camera technology?

12 Feb 20185 Shares

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Blink security camera. Image: Blink

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Amazon acquired Blink in 2017 and now its rationale behind the decision has been revealed.

Beginning with a Kickstarter campaign in 2014, Blink launched its smart camera at the beginning of 2016. Since then, it has launched another camera with night vision capabilities and a connected doorbell with a built-in camera.

The company claims its cameras can last up to two years with just two AA batteries.

Amazon acquired Blink in December 2017, but the terms of the deal – including the price paid – were under wraps until today (12 February).

A prime acquisition target

Compared to similar security cameras, the fact that Blink’s camera is wireless and retails at a much lower price point was a major attraction for Amazon. The company noticed Blink’s sales increasing on its e-commerce platform, further cementing it as a target for acquisition.

Amazon forked out approximately $90m to acquire Blink and Reuters reported that the former has its eye on proprietary chips exclusive to Blink products.

Previously, analysts had pegged the acquisition to be an element of Amazon Key, a new initiative where shoppers can set up a smart lock and surveillance camera so delivery staff can send over packages even when they are away from their homes.

Lower costs for Amazon

While Amazon may well sell the popular Blink camera as a standalone offering, the Blink-exclusive chips could also significantly lower production costs and boost the battery life of products such as the Cloud Cam and possibly even the Echo product family down the line. Currently, the Cloud Cam and Echo both require a plug-in power source to operate but Blink chips could end up changing this.

Amazon is keen on using its in-house devices to improve and deepen its relationship with customers, so it would make sense for it to enable more efficient power usage options and enhance portability with the technology in Blink products.

The proprietary technology could give another element of crucial exclusivity to Amazon devices, making them more difficult for rival retailers and manufacturers to emulate. The Blink acquisition boosts vertical integration and could slash production costs for the tech giant.

Blink’s parent company, Immedia Semiconductor, was founded in Massachusetts by a team with a wealth of experience in the chip industry. CEO Peter Besen and two co-founders came from Sand Video, which they sold to Broadcom in 2004.

Ellen Tannam is a writer covering all manner of business and tech subjects

editorial@siliconrepublic.com