Could Amazon’s Latest Acquisition Hurt Ubiquiti Networks?

Amazon (NASDAQ: AMZN) recently announced its acquisition of Eero, a maker of mesh home routers that deploy multiple Wi-Fi access points to eliminate the “dead zones” of traditional routers. Eero launched its first mesh routers three years ago, and other major companies — including Alphabet’s Google, Samsung, and Netgear — followed suit.

One of those rivals was Ubiquiti Networks (NASDAQ: UBNT), a networking equipment company that sells long-distance Wi-Fi products for service providers and enterprise customers. In 2016, Ubiquiti followed Eero into the mesh home router network with its AmpliFi wireless system, which includes a sleek box linked to mesh point antennas plugged into wall sockets.

AmpliFi got off to a rocky start with a last-minute redesign and high shipping costs in 2017. But it subsequently became a key component of Ubiquiti’s Enterprise Technology unit, which also sells its UniFi and MFi hardware devices to enterprise customers. Could Amazon’s takeover of Eero boot AmpliFi and other mesh home routers out of the market?

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