Why Amazon Might Want a Big Piece of the Smartphone Market

Nerval's Lobster writes: If rumors prove correct, Amazon will unveil a smartphone at a high-profile June 18 event in Seattle. According to a new article in The New York Times, Amazon's willing to take such enormous risks because a smartphone will help it sell more products via its gargantuan online store. In theory, a mobile device would allow customers in the midst of their daily routines to order products with a few finger-taps, allowing Amazon to push back against Google and other tech companies exploring similar instant-gratification territory. But a smartphone also plays into Amazon's plans for the digital world. Over the past several years, the company has become a popular vendor of cloud services and used that base to expand into everything from tablets to a growing mobile-app ecosystem. A smartphone could prove a crucial portal for all those services. If an Amazon smartphone proves a hit, however, it could become a game-changer for mobile developers, opening up a whole new market for apps and services. Amazon CEO Jeff Bezos has succeeded in the digital space largely by opening up various platforms—whether Kindle self-publishing or the Amazon app store—to third-party wares. It'll be interesting to see whether he does something similar with the smartphone. Early reports suggest Amazon's phone will be exclusive to AT&T.

Comments

Amazon Phone

[ChanceCallahan]

Now with Prime Smugness!

Could be big if...

[Scowler]

... there is no subscriber cost other than Amazon Prime, at least for a basic smartphone plan. A lot of cheapskates have no particular allegiance to iOS/Android, and would be starry-eyed by such a deal.

In other news

[slinches]

I want to win the lottery.

Of course Amazon wants a major piece of the mobile phone market. That's not news. What would be news is if they make a phone that plays nice outside of Amazon's ecosystem and isn't locked down like the rest of the kindle family of products.

Re:In other news

[Threni]

If it has the Play Store I'll consider buying it. If it doesn't, I won't. It's pretty simple.

Re:In other news

[timeOday]

Why anybody would want to be in the mobile phone market is less clear to me than it seems to be to you. Unless your name is Apple, your margins will be miniscule. Unless your name is Samsung, you aren't a big enough player to make up for low margins on huge volume. In short, you will not turn a profit.

I assume Amazon has an app you can install on any phone. Why make phones?

Re:In other news

[beh]

Think about it this way - before Apple made their inroads into the phone market, the dominant players were companies you don't even hear much about as phone makers any more (Nokia, Ericsson, ...) and back then people thought, Apple wouldn't be able to make any significant inroads into that market either.

In fact, they pretty much disrupted the entire sector in the process - they may not be the market leader by market share, but they managed to build up and retain the "premium" brand image in the market - and keep the highest share of profits in that market.

As for Amazon - there are two things at play here: Sure, anyone can install amazon's app on the iphone - but it doesn't come pre-installed; the iTunes store does; so on the app side, they can only profit from people who go and install their app first - and somehow I can't see Jeff Bezos talking Apple into _please_ include the Amazon store into the default apps on the phone. Apple would probably rather start entering Amazon's business rather than allowing amazon to add an app to the base iOS which will be in part competition to the iTunes store.

Secondly, I would expect Apple to move more into the cloud market - which will be tied in nicely with iOS - and which might end up being a threat to Amazon's cloud services.

Amazon is large enough and has the technical background to try and successfully bring a new phone to the market - I'm not quite sure, though, whether they have something really new to bring to the table that others don't have and which would allow them to disrupt the market in a way large enough to make it pay off...

Drive amazon services?

[mveloso]

It's odd - I'm not sure if a phone would drive more amazon services. What's their motivation? They already see what I buy, when, and in many cases for whom, but they don't really seem to use that information very effectively.

I see some targeted stuff, but not as much as I would expect given my ridiculously long shopping history. A phone would allow them to know more, but they don't seem to be using the data the have...so the extra data would be pointless.

They're not like google, in that their mobile is not a stalking horse for targeted ads. They're not really like Apple, since they don't really make high-end hardware. Launching a cellphone because you're feeling left out isn't really a great business case. Amazon doesn't really need to control the experience, since you can buy anything on amazon on other platforms.

Maybe they got a good deal on bulk minutes and cheap hardware, and want to pass the savings onto the public?

Re:Drive amazon services?

[Qzukk]

I think it's easy to see where they are going: You take your Amazon phone to the store, snap a picture of what you want, and get it shipped to you. Or not.

Amazon then uses the decisions and GPS coordinates of the people using their phone to discover that store X in your city is cheaper than Amazon. They then lower the price of that item that they show to the people whose phones are or have been in that store, until the people in that store start buying it from Amazon instead.

Uh ... Blackberry?

[TrollstonButterbeans]

> probably cheaper to buy blackberry than develop a phone from scratch

If Blackberry can't market their own phones, how could a non-phone company like Amazon do so?