Amazon Android Phone a Really Good/Bad Idea

Discussion
Nov 22, 2011
George Anderson

Amazon, apparently buoyed by the positive response to its new Kindle Fire, may be looking to add an Android smartphone to its product lineup. If true, it could be a a big hit or a huge mistake. The answer you get depends entirely upon whom you ask.

According to Mark Mahaney, an analyst with Citigroup, Amazon is working on a smartphone that will hit the market in the fourth quarter of 2012.

Instead of the revolutionary product envisioned by Steve Jobs in the development of the first iPhone, the new Amazon smartphone, according to an article on the InformationWeek website, will be "something akin to a store-branded credit card, a tool more focused on customer loyalty than on customer delight and amazement."

If it really wants to create something special, Amazon might think in terms of creating its own phone network (another Steve Jobs idea) and offer mobile plans at price points well below what’s standard on the market. "The next great smartphone," according to InformationWeek, "will be the one that transforms the network and its cost structure."

While the Kindle Fire generally gets positive marks for being positioned in an open area between plain e-readers and Apple’s iPad, there is some question as to whether an Amazon smartphone will find a similar open space in its category.

A Fast Company article suggests that an Amazon phone might not find an open niche, but could certainly grab rapid share in the $100 to $199 market by "leveraging Amazon’s ecosystem and its cloud services."

Another possibility is that Amazon could sell its new phone at a loss, a la the Kindle Fire, at a price below $100. "The entry of a rich-content Amazon phone would shake the market up dramatically, likely stealing big chunks of the low-price market," according to Fast Company.

Discussion Questions: What would an Amazon smartphone have to deliver to be a success? Do you see the company, as suggested in one article, starting its own phone network?

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7 Comments on "Amazon Android Phone a Really Good/Bad Idea"


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Matt Schmitt
Guest
9 years 5 months ago
Amazon seems to be very focused on hardware as a loss leader to further strengthen customer loyalty and to gain a deeper commitment from customers to long-term service plans and subscriptions. By leveraging their Amazon Prime program (which was first just a way to get free shipping) they are providing customers with value added benefits for loyalty. One thing is clear. They are capitalizing on the success of Android and hoping to outflank Google by co-opting Android as their customer device platform, with Amazon’s own cloud services as the scalable back-end for hosting, content delivery and e-commerce. I’m not sure who will be most nervous about this development. Most people would guess Google and Amazon are the biggest competitors, but the telcos and brick and mortar retailers are probably not happy either. Retailers have already been nervous about customers using their smartphones to research at brick & mortar and then buy from Amazon. With a phone that’s even more tied to Amazon services, this could exacerbate the retailer’s challenge to find ways to convince shoppers… Read more »
Max Goldberg
Guest
9 years 5 months ago

Amazon has plenty of time to explore its options before releasing a phone in Q4 2012. A year is an eternity in technology. The phone could do any of the things outlined in the article. Either way, using the open source Android platform, and backed by Amazon’s cloud, store and customer service, Amazon could become an instantly important player in the mobile marketplace.

David Dorf
Guest
9 years 5 months ago

Amazon has an opportunity to further leverage its investment in music, apps, AWS (cloud), and Kindle with a mobile phone. But can they really afford to compete with Google, Apple, and Netflix? They already operate on thin margins and Wall Street has not been kind of late. It won’t be easy, but I think they’ll be successful if they continue to build out the Android ecosystem. People want all their content centralized and available on multiple devices. Deliver on that promise and they’ll retain their customers’ loyalty.

Bill Emerson
Guest
Bill Emerson
9 years 5 months ago

It would appear Jeff Bezos is looking to, at least partially, take on Apple, perhaps capitalizing on the loss of its visionary leader. Apple has been described as primarily a media company. This seems very similar to what Amazon is talking about. Will it be successful? We’ll see.

Joel Rubinson
Guest
9 years 5 months ago

It makes sense if you believe that Amazon and Apple are in a battle to win the technology company wars (along with Google and Facebook), as Fast Company suggests. There are no longer any marketing gangland territorial boundaries that can’t be crossed

Herb Sorensen
Guest
9 years 5 months ago
So far, excellent comments here. I think consideration of the major players in retail/human relations is important to judge this potential development. I have pointed out for some time that Amazon is THE premier SELLING company in the world. Walmart is THE premier logistics organization in the world. Apple is THE premier “human” experience organization in the world. Google is THE premier information management organization in the world. WOW! What a retailing conglomerate THAT would be. But I still would bet on Amazon staying at the front of the retail pack in brain space. They clearly have the dominant position in electronic shopping, and the other players are so far behind in this space that I question whether they even realize what they are up against. Look, nothing in the world happens until somebody sells something. It’s an old saw, but in the commercial world it was true generations ago, is true today, and will be true generations from now. Unfortunately for the other players, selling skills (at self-service retail — customer, sell yourself) largely… Read more »
casey adams
Guest
casey adams
9 years 5 months ago

For all the things that make Amazon the online megastore it is, the move to an Android phone is a perfect one. Amazons cloud hosting data services, music, books, and bottom dollar online shopping have created a sub-culture with strong loyalty ties.

If Amazon can figure out how to package their bundle of services through a consumer mobile device, the market will see a clash of the titans — team Apple and team Amazon — almost as big as team Edward and whatever that other vampire dude’s name is.

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