Daily Management Review

Amazon forks out $ 90 million for chips of a camera system manufacturer


Last December, Amazon announced purchase of Blink company. It specializes in the development of wireless surveillance cameras and smart doorbells, through which home owners can see in real time who is at their door using their smartphones.

Mike Seyfang via flickr
Mike Seyfang via flickr
The financial terms of the deal were not disclosed, but Reuters learned that Bezos paid $ 90 million for the start-up. The reason that prompted Amazon to invest in Blink was the energy-intensive processors that would help lower the production costs of other product lines, from the Amazon Cloud Cam, a family of smart speakers Echo, said the agency's informers.

Amazon places "smart" technology at the center of the plan to forge closer interaction with its customers. Cloud Cam and Echo are currently in need of a plug-in power source for operation. Blink, who claims that its cameras can run two years on one pair of AA lithium batteries, can change this.

Amazon announced the purchase of the startup in December. At that time, analysts speculated that Amazon could use Blink’s technologies to improve the Amazon Key service, which allows to run couriers to the house in the absence of the owners. So far, the service is not compatible with security systems, and couriers need to ask the owners to turn off the alarm on the day of delivery. If Blink solutions are integrated with home alarms, it will allow independently disabling the security system.

However, Blink's business is not limited to cameras. The little-known startup owner, Immedia Semiconductor, was founded by engineers at the Massachusetts Institute of Technology. Heads of the company started developing chips back in the early 2000s as part of the Sand Video project, which was later sold to the giant Broadcom Ltd.

Created in 2008, Immedia initially focused on processors for video conferencing and notebook manufacturers. However, vendors were not ready to pay $ 1 for the chip, when the market had cheaper offers. Then Immedia decided to create its own camera and stopped worrying about whom to sell hundreds of millions of chips.

This is how Blink developed a high-resolution wireless camera with motion detection. The battery-powered device can be easily installed and moved to another location as needed. Thanks to the technology used, its standard battery can work for a year without having to be replaced.

The system includes an application that allows the user to turn on/off the surveillance mode, configure the notification settings for each camera, monitor the temperature in the house and receive messages if the connection with WiFi is lost or batteries need to be replaced. For those who want to see what is happening in the house, there is a Live View mode for constant video communication.

According to recent financial statements, Amazon spent $ 78 million on acquisitions. Sources of the publication argue that the amount rose to about $ 90 million in the negotiation process.

Now that Amazon has its own chips, it allows the giant to directly contact manufacturers, bypassing intermediaries like Ambarella Inc, which supplies components for GoPro. "Vertical integration reduces costs, digital video chips are among the most expensive components in the camera," says Matt Crowley, executive director of Vesper, an audio and semiconductor manufacturer.

source: reuters.com