Once again, Amazon’s (AMZN – Analyst Report) dominance of the e-commerce world was on full display with its annual Prime Day, an exclusive “shopping holiday” designed to provide Prime customers with limited-time-only offers. Amazon uses the day both as a celebration for its existing Prime customers and as a reminder that if you don’t yet pay for Prime, you totally should.
One of the best offers of Prime Day was on Amazon’s own Echo device. The product was discounted $50 to $129.99, the lowest price it has ever been offered for. For those of you that don’t know, the Echo is a “smart speaker” that utilizes Amazon’s Alexa home automation technology. The speaker can stream music, order products from Amazon, and link up with compatible devices that do things like dim your home’s lights or adjust the air conditioning.
Users interact with the Echo by saying “Alexa, ____.” For Prime Day, Amazon also offered exclusive deals to users ordering through the Alexa software, so there were surely many customers “talking” to Alexa throughout the day Tuesday.
The Echo device and Amazon’s Alexa software are examples of consumer-level Internet of Things (IoT) products. The basic premise of the IoT is that our daily lives can become more efficient through connecting our regular activities with electronic, software, or sensor technology.
(Also Read: How to Invest in the “Internet of Things”)
Examples of popular Internet of Things devices include home security systems, wearable technology, and even public trash bins that automatically alert a municipality when it is full. The IoT is also breaking into the commercial world, and manufacturing companies are beginning to synchronize their machines with sensors and computers to track performance.
With the affordability and popularity of its Echo device, Amazon has quickly risen to the top of the in-home Internet of Things market. Amazon’s Dash Buttons, which allow customers to re-order products from Amazon.com through the click of a physical button that can be placed near its corresponding product, are another example of a consumer IoT product.
The reason it’s so important that Amazon is getting its footing at the top of the Internet of Things market right now is that it will only continue to grow in the near future. According to research firm IDC, the IoT market will nearly triple in just a few years. In 2014, the global IoT market was worth $655.8 billion, but it could reach up to $1.7 trillion by the year 2020.
Amazon hasn’t always had the best success with its branded electronics line, and it had to discontinue the production of its mobile phones due to weak demand. However, the demand for IoT devices should only be going up, and Amazon is one of the few companies offering something that is both affordable and packed with features.
Recently, Amazon expanded its smart speaker line with the introduction of the smaller Amazon Tap and the portable Amazon Dot. Both also utilize Alexa technology and are even more affordable than the Echo.
Simply put, it’s time for investors to start taking the Internet of Things seriously. Amazon most certainly is.
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