Amazon Enters Home Security Services

Author: IPVM Team, Published on Apr 26, 2018

Move over ADT? It is certainly what investors have feared for ADT, especially since Amazon acquired Ring.

[Update: We spoke with Amazon and have more details on operations and limitations at the end of the post]

Now, Amazon has launched their own home security services, including alarms, video surveillance and installation:

The Amazon employee reference is especially interesting since historically Amazon has used freelancers with mixed results (see our test). However, given the size of the home security (i.e., 1 out of every 5 US homes have systems already, it could justify such direct employees and be a major threat against ADT).

Amazon is offering 5 packages to start, with the security / video one starting at just $320 including installation, very low for conventional security offerings:

Plus, for that price, Amazon is committing to have an installer come to the homeowner's house twice:

Evidently no more keypad, Amazon aims to alarm one's security system via Alexa:

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And Amazon is throwing in a modern version of the old 'Fake TV':

Self Monitoring Free But Monthly Monitored Pricing Undetermined

Self-monitoring will be free, as it is for other consumer services like Simplisafe. However, for central monitoring, we have not yet seen what monthly pricing will be (or if it will be offered). That, of course, will be a key element, given traditional providers charge $30+ per month.

Security Licensing

One major concern is licensing. In most US states and many countries, installing home security systems requires licensing. While Amazon's marketing lists 'Amazon employees' to 'take control of your home security' it is not clear how many and or where will be licensed appropriately.

Competitive Impact TBD

On the one hand, given Amazon's success and size, it is easy to conclude that ADT will go bankrupt and this is the end of the residential security market. On the other, Amazon is not always successful, and their CEO literally encourages failure, so it is possible that a few years from now, this is looked back on as a gimmick or half-hearted effort.

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Feedback from Amazon

We spoke with Amazon and have the following feedback on key points:

  • Amazon is not offering any central station monitoring option (at least at this time). This means the only choice is for the user to self-monitor and call the police themselves.
  • The alarms will be relayed via the smart hub, most typically via the Wink Hub 2 app.
  • The alarms will be from either the camera's motion detection (which could create lots of issues) or the sensor's detection.
  • Amazon techs are not licensed and Amazon's position is that they do not have to be since there is no central station monitoring nor direct dispatch (i.e., the user needs to call the police themselves). This still runs some risk depending on various municipalities contracting or security installation laws.
  • That the user needs to respond to alerts creates problems (i.e. dealing with nuisance alerts, when they are asleep, out of town, etc.). In particular, they will need to call the police themselves, which could be difficult if they are in their house being robbed or they are on an airplane or away from their local area, making it difficult to dispatch by the local 911, etc.

Overall, the requirement of self-monitoring and self-police dispatch makes this a significantly less valuable offering than conventional systems or even Simplisafe with their optional central station monitoring.

4 reports cite this report:

Bad Move: ADT Markets Rival Amazon on Aug 08, 2018
Amazon may be lining up ADT as its next victim but ADT is happy to promote Amazon. Amazon has made major moves recently, including acquiring...
Simplisafe Acquired At $1 Billion Valuation on Jun 29, 2018
Simplisafe, the competitor alarm monitoring companies historically most love to hate, has been acquired by a mega private equity firm for a $1...
Amazon Ring Launches $10 Monthly Professional Alarm Monitoring on Jun 15, 2018
Amazon's Ring has announced an alarm system with 24/7 professional alarm monitoring for $10 per month, a fraction of the $30+ per month traditional...
ADT Stock Drops 50% Since IPO on May 17, 2018
It has been a brutal 4 months for ADT. They first expected to IPO at ~$18. They IPOed at $14, dropping immediately to $12.39 And now, not even...
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