Here are the top stories from last week.
Alexa partnerships/integrations have become routine at CES and this year was no different. Some of the more notable ones were the Lenovo Smart Tab tablet/smart display, Ford's new car infotainment system and Vuzix smart glasses.
Key by Amazon (AMZN - Free Report) , the keyless entry system for Amazon customers brought the all-new Schlage Encode Smart Wi-Fi Deadbolt, the first WiFi-enabled smart lock that allows you to manage access to your home by people who might need to even when you’re away; Key for Garage with Chamberlin Group (CGI) enabling secure package delivery into your garage; compatibility with the Ring app for access control; and Key for Business (works with most building access systems), which allows building owners and managers of commercial and residential properties control access for package delivery to residents.
There was also a new smart peephole camera for apartment units from Amazon's Ring and motion-activated outdoor lights.
Amazon Plans for Closed Sears Stores
Amazon’s takeover of Whole Foods has been one of the best things for the upscale grocery vendor. After rationalizing inventories, integrating sourcing, overhauling pricing policies and increasing efficiencies overall while endearing itself to more than just premium customers, the company finally makes enough to think about expanding beyond its 470 stores in coastal cities and affluent neighborhoods to try its luck at a broader demographic.
And that’s probably why Amazon executives have been busy visiting landlords at closed Sears and Kmart stores that are spread across the country, including in some states where Whole Foods doesn’t have a presence. The company needs to increase its physical presence substantially if it is to compete effectively with Walmart (WMT - Free Report) and Kroger (KR - Free Report) .
The expansion is also in line with Amazon’s own strategy of increasing physical presence through AmazonGo, book stores and 4-star stores.
Amazon’s AWS now has a MongoDB compatible document database called DocumentDB to go hand in hand with its AWS Database Migration Service (DMS). Customers can use DMS to migrate their on-premise or AWS EC2 workloads that are in MongoDB with hardly any system downtime.
They have good reason to do this according to Amazon because its DocumentDB offers several advantages over Mongo, including better security, greater efficiencies, no data replication (so faster), increased scalability of up to 64TB per data cluster (so no need for over-provisioning storage), with automatic and continuous data backup to Amazon Simple Storage Service (S3) with free recovery for up to 35 days.
What’s more, there is no upfront cost for AWS customers, so you can simply pay as you use.
Amazon has collaborated with a number of parties over two years to develop DocumentDB and some of its first customers at launch are information-based technology company and digital banking leader Capital One, Dow Jones, The Washington Post and sports coach and advisory outfit Hudl.
Amazon is getting deeper into warehouse robotics in an attempt to further lower cost. The company already uses Kiva robots (after acquiring the company for $775 million in 2012) to fetch and carry goods inside the warehouse.
It now has a deal with French robotics company Balyo to deploy its self-driving forklift trucks in exchange for stock warrants for a 29% stake in the company. If Amazon orders up to 300 million euros of Balyo-enabled products, it will be entitled to exercise the warrants. Balyo generated just 23.3 million euros last year, which is an indication of just how big the deal is expected to be.
Dash Buttons in Trouble
A higher court in Munich, Germany ruled in favor of a regional consumer watchdog Verbraucherzentrale NRW claiming that the terms of Amazon’s Dash service are objectionable. The court ruled that the company was not providing adequate information about a purchase and limited its right to appeal.
The current terms allow Amazon to substitute a product, including with a higher-priced alternative and not providing adequate information about the order that is being repeated. Since order details are provided after the order is placed instead of before, you may end up reordering an Amazon substitute thereafter.
Dash allows customers to place an order for repeat-use staples like washing powder by pressing a single button. Some customers may simply not care for the sheer convenience of ordering with minimum fuss, as Amazon tells Techcrunch:
“The decision is not only against innovation, it also prevents customers from making an informed choice for themselves about whether a service like Dash Button is a convenient way for them to shop. We are convinced the Dash Button and the corresponding app are in line with German legislation. Therefore, we’re going to appeal.”
Ring’s Troubles in Europe
Media reports have accused Ring of failing to inform users that the video footage collected by the app wouldn’t be encrypted and would be reviewed by humans instead. The company apparently allowed its Ukraine team unfettered access to every Ring video from anywhere in the world.
The reports also said that leadership at the company felt encryption wasn’t a good idea as it lowered the value of the data it was collecting. The whole exercise was designed to help its A.I. efforts (the manually tagged objects were used to train machines to recognize later).
Ring’s response was a vehement denial and an assertion that it didn’t have access to the data mentioned: “These recordings are sourced exclusively from publicly shared Ring videos from the Neighbors app (in accordance with our terms of service), and from a small fraction of Ring users who have provided their explicit written consent to allow us to access and utilize their videos for such purposes. Ring employees do not have access to livestreams from Ring products.”
New India Rules May Impact Growth
Amazon and other large online retailers (mainly Walmart-owned Flipkart) in India had found a way to circumvent rules that required foreign retailers to operate as marketplaces alone, to store no inventory of their own and to not influence pricing on their platforms so smaller retailers wouldn’t be negatively impacted.
On the face of things, they complied with the rules, but in fact their procurement practices involved purchasing substantial amounts of inventory from companies they partially owned. This allowed them to increase profits from scale, sell private label products and influence pricing with deep discounts to the detriment of small sellers.
The Indian government has finally tweaked the rules that will go into effect on Feb 1. The rules outlaw these practices and require the companies to sell their stakes in sister companies (in Amazon’s case, Cloudtail that it jointly owns with Infosys founder Narayan Murthy).
So there’s a lot of lobbying going on, especially considering the amount companies like Amazon and Walmart have spent and are likely to go on spending. But the Narendra Modi government is likely to maintain a tough stand first because Indian ecommerce is a $20 billion opportunity so American firms have more to lose by bowing out, second because there is new Indian challenge from Reliance Group that will lobby to ensure that the changes go into effect and third because elections are around the corner and the government needs to deliver on promises it has made to small entrepreneurs and farmers.
Amazon shares carry a Zacks #2 (Buy).
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