Brief: Amazon invests millions in a startup, then launches a similar product

Image credit: Amazon.

The news:

• Amazon has launched the Echo Show, a device with video conferencing and home intercom features, as well as the capabilities of other Alexa devices, reports Recode.
• The problem: the Echo Show is similar to a product launched last year by a startup called Nucleus, in which Amazon had invested US$5.6 million via its Alexa Fund.

Why it matters:

• Amazon has a history of competing directly against its partners and customers. To be fair, Google and Apple do too.
• Nonetheless, Amazon’s move may cause companies to be wary of receiving investment from the ecommerce giant. “They must realize that by trying to trample over us — a premiere partner in the Alexa Fund ecosystem — that they are going to really cripple that ecosystem,” says Nucleus founder Jonathan Frankel.
• For startups working closely with big companies, this a cautionary tale of how partnerships with corporates may not be equal.

Update on May 11: Amazon has issued a statement. In full:

We think giving customers choice is important, and our vision is that customers will be able to access Alexa whenever and wherever they want. Our AVS partners are a big piece of that vision, and they are important to us. Our strategy does not involve selling every Alexa end-point, and we want to see our partners be successful.

We didn’t get the idea for Echo Show from Nucleus. Alexa is already on screens – Fire TV and Fire Tablets. We’re always thinking of what will benefit our customers. We know our customers love to have choice in form factors, and that’s a goal of ours on the Alexa team. We think the Nucleus product is very complementary to Echo Show – it’s thinner and can be mounted on the wall and serves a complementary purpose in the home. Finally, we are working hard to bring all Alexa capabilities, including calling and messaging, to AVS devices like Nucleus. We think Nucleus devices can be great endpoints for Alexa communications.

Finally, we are working hard to bring all Alexa capabilities, including calling and messaging, to AVS devices like Nucleus. We think Nucleus devices can be great endpoints for Alexa communications.