Amazon has been offering security packages to select cities and states in the United States since around December 2017, albeit somewhat under the radar. The company’s security offerings include a smart package, smartest package, indoor base, outdoor base and outdoor plus. Prices for the packages vary from $240 to $840.
IHS Markit estimates that in 2017 only 2.9 percent of professionally monitored security systems in the Americas region were do-it-yourself (DIY) installations. The penetration rate of professionally monitored/DIY systems is expected increase to 5.5 percent by 2022. The Amazon security packages could turn out to be a unique hybrid approach.
According to Blake Kozak, principal analyst at IHS, the significance of the security packages from Amazon is less about what they offer today, but rather the foundation they lay for the next 12 months. The current packages are an enhancement to Amazon’s in-home consultations, which have been available since mid-2017. Moreover, these packages appear to include battery-operated devices only. This means outdoor wired cameras will not have the power cord pulled through the wall and doorbells will not be hardwired into mains power. As described by Amazon, the process of consultation and support (installation) is provided in two separate appointments. The description of the appointments suggests that more advanced installations could be available because pricing is based on the time it takes to install the devices, which can vary if customers add devices to the package offering.
In its current format, the Amazon service will not likely impact professional security providers such as ADT or Vivint, as there is no panel and the ability to arm and disarm the security system is based purely on the use of Alexa and a mobile device. If Amazon were to add key fobs and a keypad (such as the Nortek panel that comes with the Samsung Smartthings ADT Home Security Starter Kit), and keep the monthly professional monitoring fee under $20, then this service could bring about significant disruption in the professional alarm market.
Another gap in the Amazon offering is the lack of continuous access to a security professional. The actual installation of the security system is not the biggest value that security service providers offer; rather, it’s the peace of mind knowing that a professional truck roll to your home is just a phone call away. With Amazon, once the two appointments are complete, the consumer may have to spend another $99 to have an Amazon specialist come to the home.
