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Why Amazon Might Want a Big Piece of the Smartphone Market

Soulskill posted about a month and a half ago | from the because-the-world-is-not-enough dept.

Cellphones 61

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.

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61 comments

Amazon Phone (2)

Chance Callahan (3422793) | about a month and a half ago | (#47258023)

Now with Prime Smugness!

Yet another nail in the coffin of Firefox OS. (0)

Anonymous Coward | about a month and a half ago | (#47258401)

If this phone from Amazon represents anything at all, it's that it's just one more nail in the coffin that Firefox OS is laying in.

Let's face it, Firefox OS is pretty much a dead-end project at this point. It is like a fetus just prior to being aborted; it was a mistake to begin with, it is unwanted as it is, and it would be very unwanted were it to survive. The humane thing should be done, and Firefox OS should be euthanized.

Even people living in third-world hellholes want and deserve better than what Firefox OS can give them. And that's exactly what they get when they buy second-hand Android and iOS devices from Europe, Asia, North America and Australia. And in a few years, they'll apparently also have Amazon phones to choose from, too.

Re:Yet another nail in the coffin of Firefox OS. (0)

Anonymous Coward | about a month and a half ago | (#47259911)

Fuckwit.,

Re:Yet another nail in the coffin of Firefox OS. (1)

CaptainDork (3678879) | about a month and a half ago | (#47261713)

You tease us with the statement, "Firefox OS is unwanted ..." We're here to learn from you. I know nothing about Firefox OS and would like to know more from you, please. Thank you.

"Filter error: Please use fewer 'junk' characters (0)

Anonymous Coward | about a month and a half ago | (#47258043)

"Filter error: Please use fewer 'junk' characters."

For what (1)

peragrin (659227) | about a month and a half ago | (#47258053)

Anyone who wants to shop online at work will shop online at work with a bigger screen.

The amazon app while useful is a pain to use on a small screen.

Now if you combined amazon prime music and movies into the phone then it might make sense. however even then the use cases for watching movies and listen to music is quite small compared to the whole mobile phone market.

Re:For what (0)

Anonymous Coward | about a month and a half ago | (#47258307)

Anyone who wants to shop online at work will shop online at work with a bigger screen.

You mean like on their desktop computer? I wouldn't assume that. Someone could easily shop at work from the convenience of a toilet stall from their mobile phone. The privacy -- as well as the peace & quiet -- of a toilet stall can be a nice place to shop sometimes.

Re:For what (0)

Anonymous Coward | about a month and a half ago | (#47259983)

Someone could easily shop at work from the convenience of a toilet stall from their mobile phone.

Aren't you worried that people in adjacent stalls will hear the splash when you download a Microsoft product?

Re:For what (1)

LynnwoodRooster (966895) | about a month and a half ago | (#47259089)

I find it quite easy to use. Granted, I have a Samsung Note II - which has a nice 5.5" screen. But it's not hard to shop from it - especially Kindle books. Now if you had a smartphone with a sub-4" screen, I could understand the concern...

Re:For what (1)

rtb61 (674572) | about a month and a half ago | (#47260605)

All to many bosses are greedy control freaks, for the majority of works there is not the opportunity to do anything but work at their computer terminal. To do anything online means carefully slipping out their smart phone and logging on, without getting caught. You have to be careful not to view every ones interactions through your own interactions. So quickly sneakily logging on get your stuff down and play without getting caught, work in many environments not being much different to high school, except the bully is now the boss ;). By far the majority of employees do not get to do their own personal stuff online on a bigger screen.

Could be big if... (2)

Scowler (667000) | about a month and a half ago | (#47258065)

... 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.

Re:Could be big if... (1)

nomad63 (686331) | about a month and a half ago | (#47258199)

I would buy it if it gave me unlimited free data a few minutes of talk time with prime membership. I would also finally say yes to prime. Right now I am not shopping amazon enough to justify prime as their video titles are not a deal maker or breaker for me. But if they throw a basic cell plan into the prime mix, then the balance of the scale may tip enough to convince me. But again, shopping on mobile platform is something I will never do. I prefer to open multiple screens to compare products before making any decision, regardless how inexpensive it is. This is pulling teeth hard if nothing else. and I will never be convinced to commit to it, amazon phone or otherwise.

Re:Could be big if... (1)

rolfwind (528248) | about a month and a half ago | (#47258247)

I'd take it if it gave me 2GB data (and after that a throttle, not cutoff), 100 mins talk, texts.

But unless it's cheap, I'm hesitant to buy a 1st or even 2nd gen smartphone from a new entrant into the market.

Even if they get everything perfect, apps just won't be there.

Re:Could be big if... (1)

nomad63 (686331) | about a month and a half ago | (#47258911)

Data is king. I am willing to live with 3G, if it is really unlimited. LTE is good but for the things that require fast connections, I can wait to get home. The only allure of MVNOs nowadays is the unlimited data. I don't like to byte-count when I am mobile.

In other news (4, Insightful)

slinches (1540051) | about a month and a half ago | (#47258071)

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 (2)

Threni (635302) | about a month and a half ago | (#47258201)

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 (2)

timeOday (582209) | about a month and a half ago | (#47258451)

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 [bgr.com] .

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

Re:In other news (0)

Anonymous Coward | about a month and a half ago | (#47258623)

Your link talks about a percentage of the profits.
There are a lot of smaller companies out there still making a profit. Who cares if it's a small percentage of the total?

Re:In other news (1)

monkeyhybrid (1677192) | about a month and a half ago | (#47258927)

Amazon already have their fingers in movies, music, ebooks and app markets. With the leading vendors of smartphones having their own content deals and distribution partnerships (that generally don't include Amazon) tied to their devices, Amazon may see the move into smartphones as essential to getting their existing and future services into people's hands. Similar to what Google has done with Nexus devices, Amazon could sell smartphones at very low margins, or even at a loss, if in doing so they can protect and enhance their other revenue streams. They've now got a lot of experience and brand awareness with their e-readers and tablets, so it's not like they are starting from scratch.

Re:In other news (1)

slinches (1540051) | about a month and a half ago | (#47259511)

Amazon's margins [forbes.com] are in the low single digits right now. The razor thin margins of the mobile handset market will only be an improvement.

Re:In other news (2)

beh (4759) | about a month and a half ago | (#47260725)

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...

Amazon Apps already for iOS and Android. (1)

BasilBrush (643681) | about a month and a half ago | (#47258073)

People can already use the Amazon app to buy stuff on their mobiles. So the Amazon phone is about more than that. Perhaps like Google they want to spy on you so they can advertise to you.

Re:Amazon Apps already for iOS and Android. (1)

Russ1642 (1087959) | about a month and a half ago | (#47258101)

I don't get it either. It's like the failed 'Facebook Phone'. A specific phone won't make it any easier or better to shop on amazon. Anyone who can install the apps or visit the website can do that.

Re:Amazon Apps already for iOS and Android. (1)

transporter_ii (986545) | about a month and a half ago | (#47258107)

No, to use Amazon Apps on my first phone, I had to type in a secret key combination in order to install the Amazon App Store. My next phone was rooted, so no big deal. Obviously, they want it to come as default. It's just like everything else, if you have to google a secret key combo to install something, how many people are really going to use it?

Re:Amazon Apps already for iOS and Android. (1)

AuMatar (183847) | about a month and a half ago | (#47258161)

He meant the amazon.com app that allows you to buy stuff from Amazon, not the Amazon App Store. Amazon.com app is on Google Play and preinstalled on many devices.

Re:Amazon Apps already for iOS and Android. (1)

Russ1642 (1087959) | about a month and a half ago | (#47258163)

I just tested it out. I went to Amazon, downloaded the AppStore app and ran it. Others may have had to change the security setting to allow 3rd party apps but I already had done that. I could walk my grandma through the steps to install it.

Re:Amazon Apps already for iOS and Android. (1)

psyclone (187154) | about a month and a half ago | (#47258273)

Right, but just like their Kindle Fire tablets, the Amazon Phone (Fire Phone? whatev) will not come with the Google Play store installed, but only provide access to Amazon's App Store.

Just another slice of the mobile pie.

Amazon Late & Lame (1)

BoRegardless (721219) | about a month and a half ago | (#47258093)

Or the alternative high end & hot? Will Late & Lame sell or will they give them away?

Re:Amazon Late & Lame (1)

transporter_ii (986545) | about a month and a half ago | (#47258151)

I just purchased an 8-core THL w200s from Amazon for 200.00 bucks and Prime shipping. If they preloaded this phone with the Amazon App Store and marketed the hell out of it, they could sell the crap out of these phones for 200.00 bucks a pop. A similar American phone would sell in the 500.00 - 600.00 range.

And that is exactly how they could make a big splash in the Smartphone Market. A kick-butt phone in the 200.00 to sub-200.00 price range...

Not tied to AT&T (1)

rsborg (111459) | about a month and a half ago | (#47258253)

I just purchased an 8-core THL w200s from Amazon for 200.00 bucks and Prime shipping. If they preloaded this phone with the Amazon App Store and marketed the hell out of it, they could sell the crap out of these phones for 200.00 bucks a pop. A similar American phone would sell in the 500.00 - 600.00 range.

And that is exactly how they could make a big splash in the Smartphone Market. A kick-butt phone in the 200.00 to sub-200.00 price range...

There is no way that being tied to AT&T will allow them to hit the $200 price point without a dreaded 2 year subscription (when the unsubsidized price hits $500-600) AT&T don't roll like that - that's what their off-brand MVNO is for (Go Phone, etc).

Re:Not tied to AT&T (1)

jratcliffe (208809) | about a month and a half ago | (#47264901)

AT&T would love nothing more than a rapid reduction in the price of handsets. Means a combination of lower subsidies for AT&T, and lower prices (and hence higher usage/take rate) for consumers.

This is a good thing (1)

transporter_ii (986545) | about a month and a half ago | (#47258097)

I can't help but seeing how a real alternative to the Google Play Store as being a bad thing. However, as someone who has used both stores, developers treat Amazon apps as less important, that's for sure. Many apps I use frequently are several versions behind on Amazon. I finally had to break down and use Google to get updates.

I think Amazon stuck a fork in the eye of Google when they pulled off a fork of Android. If they are going to really pull it off, though, Apps need to be kept up to date.

Re:This is a good thing (0)

Anonymous Coward | about a month and a half ago | (#47258175)

Amazon has a big advantage in their free daily app, something pretty much everyone does except Google.

For this reason alone, I have a massive Amazon app library, even though not all of the apps are terribly useful. It'll be interesting to see how this plays out, especially with the recent introduction of Amazon coins (not that I'm a big fan of scrip currencies).

Reverse the question (1)

gurps_npc (621217) | about a month and a half ago | (#47258127)

As in why anyone would want a smartphone from Amazon.

I can easily see why amazon would like to add to it's monopoly.

The real question is can it offer ANY advantage to us for using it's hardware? If it can't, then they should give away an app, not try to sell us hardware.

For me, I can't think of anything they can do for me with hardware that they can't do with software.

Re:Reverse the question (1)

rsborg (111459) | about a month and a half ago | (#47258351)

As in why anyone would want a smartphone from Amazon.

I can easily see why amazon would like to add to it's monopoly.

The real question is can it offer ANY advantage to us for using it's hardware? If it can't, then they should give away an app, not try to sell us hardware.

For me, I can't think of anything they can do for me with hardware that they can't do with software.

Why would Amazon want a tablet? Perhaps for the same reason that Microsoft wants Azure? Everything is converging to phone/tablet/laptop combined with branded could services to support the basics (email, calendar, music, video, shopping, app store...), so Amazon is just doing what it feels is necessary to keep up with the Joneses.

Either Apple was very prescient or just lucky to have gotten there first?

Re:Reverse the question (1)

Isara (869637) | about a month and a half ago | (#47258391)

Why would Amazon want a tablet? Perhaps for the same reason that Microsoft wants Azure? Everything is converging to phone/tablet/laptop combined with branded could services to support the basics (email, calendar, music, video, shopping, app store...), so Amazon is just doing what it feels is necessary to keep up with the Joneses.

Either Apple was very prescient or just lucky to have gotten there first?

A tablet makes sense, though, given Amazon's Kindle business. Unless Amazon's looking to make something the size of a Galaxy Note, I just don't see the advantage of getting a phone from Amazon (and one that's locked to AT&T, no less).

Re:Reverse the question (1)

f16c (13581) | about a month and a half ago | (#47260395)

I have a Fire HD tablet and book reader. It's a really nice tablet, it's inexpensive and it works great when used to watch netflix movies over wifi in our apartment. It appears to match pretty much nay other tablet in functionality and breadth of applications and makes a pleasant book reader if used as such. I'm going to assume that the phone would be similar. It won't be flashy but it will do what people want for similar digital services over a phone, but for cheap. It's nice to do things over the web without having to wait for a PC to boot.

Here's a story I'd like to see: (1)

Anonymous Coward | about a month and a half ago | (#47258211)

Why articles whose headlines start with the word "why" are nothing but clickbait opinion pieces and have no place on a news site.

Re:Here's a story I'd like to see: (0)

Anonymous Coward | about a month and a half ago | (#47258467)

Shhh! Don't tell anyone how to think critically! They won't buy as much stuff.

Could Google buy Amazon? (1)

omems (1869410) | about a month and a half ago | (#47258265)

Google's income stems from making advertisers believe they know what consumers want. As Amazon's catalog grows, it becomes a larger and larger center of what consumers don't just want, but actually shell out for. From a managerial perspective, I'm sure they could talk about saving money by combing their data centers. As a consumer, I'm not sure that I'd welcome such a merger.

Drive amazon services? (3, Interesting)

mveloso (325617) | about a month and a half ago | (#47258413)

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? (3, Interesting)

Qzukk (229616) | about a month and a half ago | (#47258473)

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.

Re: Drive amazon services? (0)

Anonymous Coward | about a month and a half ago | (#47258637)

I should reserve judgement before this thing is fully announced but...

They can't do these types of things with the slew of phones on the market already?

A low-cost locked-down tablet (no Google Play) is one thing but a locked-down phone that's not competitive in terms of hardware and/or price is another. If it's only available on one carrier on a contract, this Amazon smartphone won't gain traction.

Also, 3D is likely to be a gimmick as you don't really need to see many products projected in such a fashion. You could simply go to the store and "showroom" on important purchases.

I would be pleased to be proved wrong that this thing is DOA. Amazon can't compete too well with competent hardware companies like Samsung, LG, Apple, and HTC, even if you look at Kindle tablet marketshare. And I'm guessing the phone will be less successful unless they become closer to a stock Android experience (which they won't).

Re: Drive amazon services? (0)

Anonymous Coward | about a month and a half ago | (#47259141)

3D video and gaming has also been lackluster at best. Hard to imagine Amazon tearing down that disappointing wall.

UI elements in 3D for the GUI won't likely make much of a difference either.

Re: Drive amazon services? (0)

Anonymous Coward | about a month and a half ago | (#47260059)

They can't do these types of things with the slew of phones on the market already?

Google Shopper can. It comes with the slew of phones on the market already. Why would someone install some other app?

I can do this already (1)

mveloso (325617) | about a month and a half ago | (#47267031)

I (and they) can do this already with Amazon PriceCheck and the normal Amazon app. Why bother making a whole cellphone just do reinvent the wheel?

Re:Drive amazon services? (1)

Maow (620678) | about a month and a half ago | (#47259999)

+1 Interesting

(accidental Troll mis-mod being undone with this post)

Re:Drive amazon services? (0)

Anonymous Coward | about a month and a half ago | (#47262223)

i think amazon wants google pie

how far of a leap is it amazon to config AWS to providing email, and search to portals outside of amazon stores, or paypal style payments.

Blackberry (1)

Lehk228 (705449) | about a month and a half ago | (#47259179)

probably cheaper to buy blackberry than develop a phone from scratch, and blackberry's technology is quite impressive despite the pathologically incompetant CxO's steering as hard as possible towards the ground.

BB10 already supports android apps so making amazon app store apps run on it will be easy, then integrate tightly with amazons media services (kindle, cloud player, prime music, prime video, instant video rentals, MP3 store) and they will have hardware and media services rivaling apple's and beating google's

Re: Blackberry (0)

Anonymous Coward | about a month and a half ago | (#47259259)

Too bad companies like Amazon want to be all things to all people.

This smartphone will probably have little impact on the overall market. And if it actually generates legitimate consumer buzz, any innovative features will adopted by entrenched competitors anyway.

I'm guessing the result will be similar to HP getting into the low-margin PC market: they'll spin that hamster wheel harder to generate more revenue but profits/growth will be similar as if they never entered the smartphone market in the first place. And Amazon is going to, and has to, spend billions to get this thing off the ground.

Uh ... Blackberry? (2)

TrollstonButterbeans (2914995) | about a month and a half ago | (#47259539)

> 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?

Re:Uh ... Blackberry? (1)

Lehk228 (705449) | about a month and a half ago | (#47266453)

anyone could outmarket blackberry's executives, they managed to turn #1 marketshare and +7billion in the bank into what they are today.

An Amazon Phone?! (1)

rk (6314) | about a month and a half ago | (#47259307)

And exclusively with AT&T?! Let me rush right out of here... and start shorting AMZN.

Re:An Amazon Phone?! (1)

jratcliffe (208809) | about a month and a half ago | (#47264877)

Yes, because nobody could ever launch a smartphone exclusively with AT&T and have it be a success...

Re:An Amazon Phone?! (1)

rk (6314) | about a month and a half ago | (#47265069)

Well, technically, Apple launched exclusively with Cingular, then they merged with AT&T.

Relax, I was going for funny. I guess that didn't work.

Re:An Amazon Phone?! (1)

jratcliffe (208809) | about a month and a half ago | (#47265361)

Well, if we want to be really technical (and I love a good pedantry battle!), the iPhone was announced with Cingular, but launched with AT&T Mobility. The AT&T (formerly SBC) acquisition of BellSouth (which owned the rest of Cingular) closed in December 2006, the iPhone was announced in early January, but by the time it actually launched in June, the Cingular name had been dropped in favor of the AT&T brand.

the real question (0)

Anonymous Coward | about a month and a half ago | (#47259535)

Why Amazon Might Want a Big Piece of the Smartphone Market?
isn't this sort of a dumb question? I think the real question is why they think they can ACHIEVE a big piece of the smartphone market.

Hell Research in Motion and Microsoft want a big piece of the smartphone market, but they aren't getting it. Facebook tried to get a piece of the smartphone market and that failed miserably. Why doesn't Amazon just work on their app and mobile website instead?

why this might succeed (1)

strstr (539330) | about a month and a half ago | (#47260889)

Because they already have the same infrastructure plus the large physical goods market place that all the other big players possess. In my books Amazon is Google's only equivalent.

Next we should expect them to competitively price their devices below their competitors Samsung and Apple just like was done with the Kindle HD. Kindle cost half what other tablets did at the time of launch selling for $199 whereas competitors sold their tablets for $500.

In the smartphone realm device cost $220 to manufacture yet sell for $700 unlocked price. This gives Amazon room to adjust the price and features competitively. Perhaps selling the device fully loaded for $200 unlocked and making up for lost revenue through sales of Services and goods. I would rather pay $200 for a device then $700 for example as the market has shifted away from selling contract lines. Also under contract might see the phone sell for zilch or better even when just launched brand new.

Corporations want walled gardens (0)

Anonymous Coward | about a month and a half ago | (#47261397)

Okay, news flash: Each corporation wants its own walled garden with DRM for delivering the "last mile" to consumers for the big-media copyright industry. Why would Amazon be different? They want to go to the copyright industry and license their content for distribution in their walled garden. Amazon is at a disadvantage without a small-screen phone form factor, since the Kindle is only a tablet.

Amazon wants it all ... (1)

CaptainDork (3678879) | about a month and a half ago | (#47261791)

Desk top computers, for non-business use, are the pianos of a garage band. They are huge, stationary, fully functional and easy to on the fingers. People are moving away from the desktop and using small devices to do business with Amazon which means that Amazon is not a point-topoint business model. I think it only reasonable that Amazon wants to tap into the entire business model. If they do it right, it'll be a big hit. If not, it's back to the drawing board.

If they do... (0)

Anonymous Coward | about a month and a half ago | (#47262625)

...it's going to be facebook phone 2.0...

While I make use of amazon quite a bit, I have zero interest in their forked/hacked up version of android devices...

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