At the end of 2017, Amazon made a surprising move by acquiring Blink, a company known for its smart security cameras, for $90 million. At the time, many were confused about why Amazon would invest in such a small player in the security market. Now, the reasons are becoming clearer. It appears that Amazon was eyeing Blink’s advanced power-saving chip technology, which could be a game-changer for its own Internet of Things (IoT) devices.
According to Reuters, Blink's proprietary chips allow for lower production costs and significantly longer battery life. The company claims that its cameras only require two AA lithium batteries and can operate for up to two years without needing a recharge. This kind of efficiency is highly valuable for IoT devices, especially those that are wireless and need to be placed anywhere without a constant power source.
Amazon is reportedly looking to integrate this chip into its own products, including the Cloud Cam and even the Echo Smart Speaker. For Amazon, hardware plays a crucial role in strengthening customer relationships. Currently, devices like the Cloud Cam and Echo require a power outlet, but with Blink’s technology, the company could develop more portable and energy-efficient options.
Blink was previously operated by Immedia Semiconductor, a company founded by Peter Besen, a veteran in the chip industry. Besen and his team came from Sand Video, which was later acquired by Broadcom in 2004. After leaving Broadcom in 2008, Besen started Immedia, initially focusing on video conferencing chips before shifting their attention to notebook computers. However, due to high costs, they eventually moved into the monitor market.
Blink’s 2016 security cameras were wireless, easy to install, and affordable, starting at just $99. In comparison, Amazon’s wired Cloud Cam was priced at $119.99, while Netgear’s Arlo, another wireless option, was more expensive. As Blink’s sales grew on Amazon’s platform, the tech giant began to realize the true value of the chip inside the camera.
With its own patented chip design, Amazon now has a key advantage over competitors. This means it no longer needs to rely on third-party chip manufacturers like Ambarella, which supplies chips to GoPro. By producing its own chips, Amazon can ensure better control over product development and reduce dependency on external suppliers. This acquisition not only strengthens Amazon’s position in the smart home market but also signals its long-term strategy in building a self-sufficient ecosystem of IoT devices.
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