Amazon.com, Inc. and Google Battle as Nest Bails From Amazon
Amazon.com, Inc. (NASDAQ:AMZN) and Alphabet Inc’s (NASDAQ:GOOGL) Google have been involved in a growing spat that has seen each company repeatedly take swipes at the other.
The root cause of the feud is competition, especially now that both are focusing on the smart home. Things had been relatively quiet for a few months, but now it’s back on as Google is reportedly yanking all of its Nest smart home products from the online retailer in response to Amazon’s refusal to sell the latest Nest gear.
Business Insider: Nest Will No Longer Sell Products on Amazon
According to Business Insider, on a phone call late last year, Amazon informed Nest that it would not carry the company’s latest products. That included the new Nest Secure home security system and the latest version of its smart thermostat. After digesting the news, Nest –which has since once again become part of Google — is reportedly retaliating by yanking all Nest products off Amazon.
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That’s a move that seems aimed at making Amazon look bad to consumers because obviously, having none of its products available versus some wouldn’t be considered a smart retail strategy on Nest’s part.
Whatever you see from Nest today will disappear as existing stock runs out. At this time, Business Insider says it’s unclear whether third-party Marketplace sellers will be able to offer Nest products.
At one point, Amazon did ban them from selling Apple Inc.’s (NASDAQ:AAPL) Apple TV, and the Google Chromecast, so that seems like a distinct possibility.
The Latest Chapter in Amazon vs. Google
Going back to the Google Chromecast ban, it was supposed to have ended. Back in December, Amazon confirmed it would start selling Google’s Chromecast after two years of refusing to carry the popular streamer.
However, that hasn’t happened. And you still won’t find a Google Home smart speaker on Amazon, either.
All of these smart home products have become a flashpoint between Amazon and Google. Both are now designing their own hardware –from smart speakers to video streamers and connected cameras– that integrated their voice assistants. Both are fighting hard to control the smart home and because of this competition, they have been slugging it out with attacks on each other. Notably, Google blocked YouTube access on Amazon’s Fire TV and Echo Show smart speaker late last year, knocking out a key capability for these devices.
While the two companies said publicly that they hoped to resolve the issues and return to business as usual, increasingly the new normal has meant butting heads. And it doesn’t show any signs of slowing. In fact, Amazon has recently made a pair of acquisitions — Blink smart cameras and Ring smart doorbell cameras — that bring it even closer to Nest when it comes to competing for consumer home security dollars.
And it’s not just the direct financial incentive.
Selling low-margin Amazon Echo speakers isn’t going to cause AMZN stock to go through the roof. But smart home products are Amazon’s only real play for getting its voice assistant Alexa into consumer’s hands.
Google has all those hundreds of millions of Android smartphones. The data that these voice assistants gather helps to boost the AI ambitions of both Amazon and Google. It’s a gateway to critical mobile ad revenue for Google. And voice interaction is increasingly an important way for consumers to purchase goods — which is critical to Amazon’s bottom line and the continued health of AMZN stock.
So don’t expect the battle between the two companies to go away anytime soon. In the meantime, it’s consumers who will continue to feel the fallout, whether that means not being able to watch YouTube videos on their Echo Show, or not being able to buy a Nest Secure with Prime delivery.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
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