Sources say that Amazon.com paid as much as $90 million in the acquisition of the Blink home security camera maker late in 2017, in a bet it kept secret on the energy-efficient chips of the startup.
The rationale as well as price tag of the deal, previously not reported, underscores the aim Amazon has to do more than sell a popular camera, as first thought by analysts. The e-commerce giant is exploring chips that are exclusive to just Blink that could reduce production costs as well as lengthen the life of batteries for other electronic gadgets beginning with Cloud Cam and extending to Echo speakers, said one of the sources.
Amazon looks at its own devices as the key strengthening its relationship with shoppers. The Echo and Cloud Cam currently need plug-in power sources to function. Blink, which says that its cameras last as long as two years on one pair of lithium AA batteries, could be a game changer.
The deal thus far has not drawn much attention. The maker of cameras announced it was acquired by Amazon with few details in a blog post on December 21.
Analysts have looked at Blink as part of the strategy of Amazon Key, the retailer’s new program where online shoppers can set up a smart surveillance camera and smart lock so deliveries can be put inside home by personnel when the owner is not home.
However, Blink was not just a camera business, it owner Immedia Semiconductor, which is little-known, began in Massachusetts by former chip industry experts. CEO Peter Besen as well as two co-founders from Sand Video, which designed chips back in the early 2000s that decoded an improved video standard.
In 2004, Broadcom Ltd acquired Sand Video from them and they stayed on as executives, according to the Immedia website. In 2008, the group left to start Immedia with a goal of designing chips to be used for video conferencing, while later targeting makers of laptops as customers.
Dan Grunberg, one of the co-founders left Immedia during 2016, said the plan did not work out. Laptop makers were not willing to pay a per chip price of $1 when less expensive options were available.
Immedia then shifted focus by making their own camera they knew they would not have to sell millions of chips and the camera was released in 2016 without needing a power cable, which made it much easier to place on the properties of its users.