Amazon is said to be actively developing a smartphone that would present a direct challenge to Apple’s iPhone and Google’s Android devices. Two sources close to the project say the Amazon smartphone would essentially serve as an extension of the Amazon Kindle Fire – the hugely successful tablet e-reader offering (this author has a Kindle Fire and is mostly satisfied with it). Others corroborate the claim, saying that supply chain sources and knowledgeable market analysts agree that an Amazon smart phone is in development.
Rethink Wireless writes; “Amazon is reported to be readying its much rumoured smartphone, which would deliver an Android experience almost divorced from Google. ”
Forbes magazine (on line edition) speculates that Amazon will have a smartphone this year that will disrupt the wireless carrier’s business model.
According to Forbes, “Carriers have two main advantages, the first being access and the second being distribution. The proliferation of ‘pay as you go’ contractless deals on networks means that picking up a sim card for an unlocked ‘Kindle phone’ means gaining access to a network of some description should not be a problem for users – and a quick check on Amazon here in the UK shows that pre-pay sim cards for the major networks are all available through the website.”
The Forbes on-line edition further states, “Amazon can also negate the carriers other advantage – distribution. If there’s one thing that Amazon is good at, it’s selling boxes of ‘things’ and getting them to their customers as soon as possible. Their front page is one of the biggest store-fronts in the world. They have an Android based store for applications. And they have an established brand name in Kindle.”
Comment and Analysis
A key question is whether Amazon will partner with one or more major wireless carriers in the United States as they did with AT&T for 3G access/downloads on the Kindle (wireless coverage in over 100 countries and territories). The customer downloading a book/ magazine never sees an AT&T wireless bill. Rather, the content price includes the wireless access for downloading it.
A distinct possibility remains that Amazon could endeavor to “go it alone” and bypass working with carriers altogether, making the Amazon smartphone a standalone product that is not subsidized by carriers.
Other issues are the version of Android and type of wireless network(s) (3G/4G/WiFi) the new Amazon mobile device will support.
Google has just announced a $199 tablet computer that competes head on with Amazon’ Kindle Fire. Google now owns Motorola Mobility and offers all their mobile phones. Hence, we think Amazon needs to expand its product line-up to compete with the king of Android and a new smart phone would be the first step in that direction.