The new team was set up outside of Amazon and its strategic objective was complementary to Amazon's mainstream activities. This was the genesis of Amazon’s Lab126, a start-up that focused on product innovation around a new generation of connected devices. Amazon's connected device road map has progressed from the connected eReader to tablets. Most recently, Amazon’s Kindle has been talked about as a point-of-sale device.
If we fast-forward to the present day, it is difficult to escape a sense of déjà vu when looking at Google’s acquisition of NEST. Here we have a separate entity with core competencies in creating highly aesthetic consumer products, led by executives with a strong Apple-design pedigree. And, according to Google’s CEO Larry Page, Google and NEST are “excited to bring great experiences to more homes in more countries”.
However, relative to Amazon's start-up costs ten years ago, it seems that the entry cost for a new category of innovation in the connected devices arena has gone up to the order of a few billions dollars!
So what did Amazon accomplish with Lab126? What might we expect from Google/NEST? And, what does this mean for companies that can’t afford billion dollar initiatives?