Amazon to Stop Selling Google’s Nest Product Line
Business Insider is reporting that Amazon has informed Nest that it will not carry the company’s latest products and will stop selling all Nest products once it sells through existing inventory.
“After weeks of silence, Amazon’s retail team informed Nest employees on a conference call late last year that it would not list any of the newer Nest products recently announced by the company, according to a person familiar with the call. The products in question include the latest Nest thermostat and the Nest Secure home security system, among others.
“On that call, says the person, Amazon told Nest that the decision came from the top — and that it had nothing to do with the quality of Nest products, which had great reviews on Amazon. Nest employees who were on the call ended the discussion under the impression that the decision had come from Amazon CEO Jeff Bezos…”
One of those new products appears to be the Nest Hello. It is a home doorbell with a camera and the company is offering a free Google Home Mini with all pre-orders.
An Escalating Competition with Google
Amazon and Google are clashing on many fronts. The two companies produce the leading smart speakers in the market, Amazon Echo and Google Home, and arguably have the leading voice assistants, Alexa and Google Assistant. However, those are just two of the higher profile competitive segments where the companies are clashing.
Video has been another flashpoint. Amazon has Prime Video and the Twitch live streaming service both of which indirectly compete with YouTube. Google removed YouTube access to Amazon Echo Show users twice last fall. The company said initially that the action was taken due to violations of how the user experience was rendered on the device, but it was later revealed that the move was in retaliation for Amazon refusing to carry Google’s Chromecast products. Chromecast competes with Amazon Fire TV Stick products which also had access to YouTube removed in late 2017.
The latest battle with Nest shifts into the smart home category. Amazon’s Alexa voice assistant built its initial user base around smart home aficionados, enabling voice control of devices. Alexa created great synergy for Amazon by driving more sales of smart home devices through Amazon.com while increasing the usefulness of Echo smart speakers. However, since that time, Amazon has entered the smart home category. Amazon now competes directly with Nest after its acquisition of Ring, the company famous for its doorbells with security cameras. Nest also sells doorbells with security cameras as well as standalone security cameras, carbon monoxide monitors and smart thermostats. With that said, Amazon is not restricting the sale of other smart home devices in the Nest categories so this action appears to be driven more by the Google affiliation than the category.
Inviting More Competition
The interesting outcome of this will likely be more choice for consumers, but less convenience. Consumers that want to watch YouTube on a smart display will only be able to do so on a Google Assistant supported device. That involves vendor lock-in over the convenience of everything being available on all devices in a category like we saw with the internet.
On the other hand, consumers will be less likely to see de facto monopolies created by popular products. There are likely to be more choices pushed by the large platforms which should facilitate greater innovation and price competition. This will be true in smart home devices and on video platforms. YouTube has had a lock on user generated video for more than a decade. Facebook is already eroding that preeminence and Amazon is more incentivized than ever to build up Twitch and Prime Video as YouTube alternatives. YouTube has many advantages in this battle today, but it is no longer alone in the category.
There was some talk during the YouTube – Amazon Echo Show skirmish last fall that a mutually amicable agreement would be reached that was in the best interest of consumers. There even appeared to be movement by Amazon to provide Chromecast products in its online store. That outcome seems less likely today. If the Business Insider story is true, it looks like the battle between Amazon and Google will intensify further before it subsides.
Google Once Again Pulls YouTube From Amazon Echo Show, A New Opening for Facebook
