It's been a month sinceAmazon announced their acquisition of Eero,and a theory has emerged regarding Amazon's continued quest to own the home network. I would wager that they will someday launch an Amazon Prime Internet Service.
Through the Eero acquisition, Amazon gains a team steeped in residential managed WiFi expertise. Whether they choose to deliver Internet through point-multipoint (like Starry Internet), or through 5G, Amazon would be a powerhouse as an ISP. The combination of Amazon Prime Video and Amazon Prime Internet could be quite a powerful offering.
Amazon is no stranger to disrupting long-standing delivery models and has seen great success in commodities like books, IT services, and groceries. The key to their success is delivering a high-quality customer experience while driving down cost through volume. With the addition of the Eero team, they now have the expertise to develop a standalone network to facilitate the delivery of Internet access.
That is the same recipe used by Comcast Xfinity and Verizon Fios—differentiating a commodity service through customer experience and brand. Amazon has a net promoter score of 62, while Comcast and Verizon, well, not so much. Even with lower speeds, a company like Amazon would be a formidable competitor due to their sizable market reach.
What Amazon also has is the capital and patience to build out a business. Their modus operandi is to choose an industry wherein margins matter, build for scale, and wait for the rest of the competition to die off or give up. Alphabet’s Google Fiber project reportedly succeeded at their objective to drive gigabyte speed, though not at creating a wildly successful business. Amazon, with its relentless pursuit of cost savings and history of success as a logistics company, has the right DNA to be a network operator.
The final, and most compelling evidence is that Amazon has been steadily growing its presence inside the home. An Internet service is the next logical step from connected door bells, video cameras, voice assistants, and e-commerce platforms. The combined insights of all that data, coupled with that of Amazon Prime Video and Music, would take Amazon’s understanding of the consumer to a whole new level. Prime drone delivery of goods would be the icing on the cake.