Amazon + Ring (Premium)

Amazon.com is purchasing smart home security firm Ring in a deal valued at over $1 billion. This acquisition will have a major impact on the market for smart home products. And it could result in a chilling new era of fragmentation.

News of Ring's purchase arrived earlier today, separately, from both Reuters and Geekwire, and was later confirmed by Ring.

"We'll be able to achieve even more by partnering with an inventive, customer-centric company like Amazon," a Ring statement explains. "We look forward to being a part of the Amazon team as we work toward our vision for safer neighborhoods."

That Amazon would buy a company like Ring is not surprising: The online retailing giant makes the best-selling Echo home appliances, which provide voice-based access to Alexa, Amazon's digital personal assistant. With Google racing to catch up to Echo with its Google Assistant and Google Home products, Amazon has shown some resilience by stepping up its own product advances, and it has struck deals to place Alexa in many smart connected devices, including automobiles.

And Amazon isn't alone in taking a bigger stake in the broader ecosystem. Google, of course, purchased Nest in 2014 for an even headier $3.2 billion. Ever since, Google allowed Nest to retain its own identity. And, of course, Nest has worked all along with non-Google smart home platforms, including Amazon Alexa.

But the Google/Nest relationship is just now getting trickier: Earlier this month, Google announced that it was bringing the Nest brand in-house and that it was merging Nest with its own hardware team.

The worry here is that Google, with Nest, and Amazon, with Ring, could make those products work best with their own assistants. Could, over time, release new features first on their own assistants. Could even deprecate and then end support for rival assistants.

Doing so would solve the problem I previously highlighted with digital personal assistants: They're not sticky. Since any one of them works with most smart home products, and they do so nearly identically, there's nothing to keep customers from straying. If an Amazon Echo user would like to take advantage of Google Assistant because of its close ties to Android, no problem: The rest of their smart home investment will continue working.

No, there's no evidence that Amazon (or Google) is planning such a thing. But it's hard to not wonder about the future, and about further consolidation in the smart home market. And to worry that that consolidation could lead to fragmentation, where certain products only work with certain assistants.

It will be interesting to see whether other digital personal assistant makers---Apple (Siri), Microsoft (Cortana), and Samsung (Bixby), primarily---start buying up smart home companies in a bid to counter Amazon's and Google's moves. I expect to happen because it makes sense: These purchases could act like patents do in the smartphone industry, as a blocker against futur...