The Duality of Amazon Winning CEDIA
If I'm starting to sound like a broken record when I claim that Amazon is taking over, it's because Amazon is taking over.
CES, IFA, and even the Hong Kong Electronics Fair had Alexa in nearly every product. More recently, they showed off their usual cabinet of voice controlled product partners that included the likes of Control4, Yale, and NuBryte to mention a few of the dozens on display. The friendly assistant is making its way into a lot of products, a trend that is both exciting and downright terrifying for the CI industry.
Hey Alexa, What is a Trojan Horse?
Last week, CEDIA got a first-hand look at just how much voice control is taking over. It's not exclusively Alexa being integrated into products, but for the sake of whose making the biggest waves, no one comes close to what Amazon brings to the table.
Capitalizing on that momentum, Amazon's infiltration into the market was epitomized by Origin Acoustic's Valet amplifier and complimenting tool-less mount for Amazon Dots. It is the fastest way to add the $49 voice control to a high-end audio system, and the fastest way to add a $500 billion information company to the CI space.
According to Origin Acoustic CEO Jeremy Burkhardt, the idea came from a hike through the mountains with Joe Whitaker, President of the Thoughtful Home in St. Louis.
"Some see it as an amp," Burkhardt said. "Others see it as an opportunity."
Burkhardt then pointed to dealers missing the boat on iPods. The initial influence and hype it had left integrators playing catch up for a long time to try and find the initial momentum. He then notes that Sonos held that same impetus, but Alexa holds an entirely different role.
"This isn't an inflection point," Burkhardt said. "This is an entire change in the industry."
And he's right, but that change might not equate to the Golden Age for dealers that they desperately want it to be. Right now, Amazon has their own in-house integration-esque business that they have quietly been rolling out over the past few months. It offers services in seven major markets, offering everything from advice on all things echo to full home smart home consultations. It seemed that it was ready to upend Geek Squad, but their goal has shifted, or more realistically grown, to assimilate professional installers as well.
It is the McDonaldization of smart home solutions. Without giving a full blown sociology course (which I promise I'm severely under-qualified to do), the four main components are efficiency, calculability, predictability, and control. Further summed up, Amazon has the scale, money, and patience to convince an industry born on early adopters that they have the most efficient setup to bring smart technology into a home. It may convince homeowners that investing time, money, and resources into (what could be considered) a third-party installer, outright not worth the effort.
There is a lot of doom and gloom to this scenario, but Amazon is known for cannibalizing verticals by creating their own product, marketing it better, and bleeding out competitors. On the same notion that the industry should play nice with Amazon, maybe it should stop and wonder just why Amazon is so interested in the first place.
Amazon sees the value of custom integration solutions, and they know the problems of the modern-day integrator. Many dealers struggle with marketing their services, finding repeat work, or just making ends meet despite landing a few clients. Amazon doesn't have those problems. They have the money, manpower, and brand recognition to wait out the CI industry and absorb anyone who is left. Or maybe they just leave the pieces where they lie if the venture doesn't work out.
High Tides Raise All Ships
However, there is a bright side to the about-face with Amazon.
Maybe all the problems of the modern-day integrator can be solved by adding the most successful company in the modern world as an ally. There has historically been a delicate balance between investing in the mass-market vs. keeping a list of clients with deep pockets. Amazon knows exactly how to talk at large scale, and wants to bring those solutions to the CEDIA channel, according to what Sarah Zenz, General Manager of Amazon’s Smart Home Services, promoted in her keynote at CEDIA.
"Let's work together," Zenz said. "There is a mass market who want these technology solutions, not just the top 5% who can afford it."
That paradigm shift is almost a refocus on roots. Amazon's virtual catalog is beginning to look like a lot like a show-floor for integrators. Zens also notes that CEDIA certified installers get the second crack to court customers if their in-house experts can't figure out a client's A/V or home control needs.
Amazon is starting to feel like one giant digital brick-and-mortar, and that's a good thing.
The whole program has glimpses of a reimagined DIFM market that gives installers an almost unlimited list of repeat business from Amazon for clients who need a little bit of help. It is also direct access to interested consumers who will likely want more products. And, at the same time, this also opens up consumers to luxury goods and solutions, a staple of the CI community. Amazon educating consumers on the benefits of premium products is something Burkhardt says will be here for a long time.
"All the people that I care about, all my dealers, all of our friends are going to stay in business," Burkhardt said. "But if we look at how much the industry is going to change over the next few years, why wouldn’t we try to as an industry to latch on to one of the hottest selling consumer products..."
So if anybody was wondering what Amazon is doing at CEDIA, it's adding the last piece of the puzzle to Alexa. It wasn't too long ago that the Echo was a novelty. It was 'useful' for announcing a phone call, giving the weather, and playing songs through one speaker.
Now it may be the missing link between early adoption and repeat business for CEDIA members. Amazon has already partnered with Lennar, adding DIY stalwarts like Ring, Lutron Caseta, and Sonos to homes - initially avoiding integrators altogether relying on in-house experts to solve any problems. Now it sounds like they want to add integrators back in the rotation.
The bottom line is that it's possible Amazon's focus on the CI channel wasn't to absorb it; it is out of necessity. It is the olive branch from both sides that marks an "if you can't beat them, join them" mentality that can start a new market for everyone. The e-commerce giant is certainly going to need the help if they want to succeed and Amazon can, and could, lose big on this gamble. They need to not only hit all the right marks; they need to do it better than the thousands of integrators across the nation that have been working on their craft for decades. Amazon had the choice to disrupt the market entirely or add a nation of integrators as business partners.
It is a tall order, but if anyone can do it, Amazon will be the ones to try.