Apparently Amazon.com, Inc. (NASDAQ:AMZN) is not giving up on hardware despite the low sales of its Fire line of smartphones and tablets. Amazon’s Lab126 division, which developed the Kindle and the firm’s other electronics devices, is planning to increase its number of full-time employees to at least 3,750 by 2019, according to an agreement reached with California authorities earlier this year that gives Amazon $1.2 million in tax breaks. Amazon also agreed to invest $55 million in its Sunnyvale and Cupertino operations over the next several years as part of the deal.

Amazon, Inc. "Doubling Down" on Internet of Things

Bezos “doubling down” on hardware strategy

According to an article in Reuters quoting knowlegeable company sources, the hardware research expansion plans reflect CEO Jeff Bezos’s intentions to “double down” on the online retailing titan’s hardware strategy.

The expansion comes as Lab126 is in the process of testing a variety of connected smarthome devices that could provide a big leg up in its competition against Google Inc and Apple Inc, the sources said recently.

The Reuters sources wished to remain anonymous because they have not been authorized to speak to the media.

Amazon focusing on the IoT

Tech firms like Amazon.com, Inc. (NASDAQ:AMZN) are rushing to develop the Internet of Things as they view Internet-connected dishwashers, thermostats, refrigerators and other household devices that can monitor and “talk” to one another as the firs wave of a continuing demand for more connected products and services. Some skeptics say the benefits of the IoT are overblown and it will take much longer to become the norm than most companies anticipate.

The sources highlighted that Amazon is in final testing of a simple wi-fi device that could be placed in the kitchen or a closet that would permit customers to order household products just by pressing a button. They also mentioned Lab126 is working on a number of wearable devices.

Inside details like this on Amazon operations are rare, as the company is highly secretive about the operations and staffing of all of its units.

In a recent statement, Amazon.com, Inc. (NASDAQ:AMZN) noted that Lab126 was progressing “incredibly quickly”, and pointed to all of the recently released devices such as the Fire phone, Fire set-top box and several new tablets and e-readers.

“We will continue to invent and create new features, services and products, and to support this innovation. Lab 126 is also growing very quickly,” Amazon spokeswoman Kinley Pearsall explained.