Exclusive: Amazon tests smart home gadgets, expands hardware lab

Wed Sep 24, 2014 7:08am EDT
 
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By Deepa Seetharaman and Noel Randewich

SAN FRANCISCO (Reuters) - Amazon.com Inc will boost staffing at its secretive Silicon Valley-based hardware unit by at least 27 percent over the next five years as it tests Internet-connected "smart" home gadgets such as a one-button device to order supplies.

The plans, detailed in a little-known government document and by people familiar with the matter, signal Chief Executive Officer Jeff Bezos's intentions to double down on the No. 1 U.S. online retailer's hardware strategy. This is despite the lukewarm reception of Amazon's new Fire smart phone and some investors' criticism of its heavy spending on highly experimental projects.

The Lab126 division, which developed Amazon's Kindle and other consumer electronics devices, plans to boost its full-time payroll to at least 3,757 people by 2019, according to the agreement reached with California in June that would give Amazon $1.2 million in tax breaks.

Amazon will invest $55 million in Lab126's operations in Sunnyvale and Cupertino, the agreement posted on the California governor's website shows.

This expansion comes as Lab126 tests connected-home devices that could open up a new front in its war against Google Inc and Apple Inc, two people familiar with Lab126's activities said recently.

The sources requested anonymity because they are not authorized to speak to the media.

Technology companies see Internet-connected dishwashers, thermostats and other household devices that can "talk" to one another as ways to fuel demand for products and services. But skeptics say many of these devices cost too much for most consumers and could take years to go mainstream.

Amazon is testing a simple wi-fi device that could be placed in the kitchen or a closet, allowing customers to order products like detergent by pressing a button, one of the people said. Lab126 is also interested in wearable devices, the other person said. Both sources stressed that such devices may never come to market.   Continued...

 
A zoomed illustration image of a man looking at a computer monitor showing the logo of Amazon is seen in Vienna November 26, 2012.  REUTERS/Leonhard Foeger