Amazon Smart Phone Coming in 2012 May Challenge Carrier Model


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.



0 thoughts on “Amazon Smart Phone Coming in 2012 May Challenge Carrier Model

  1. Thanks Alan for the summary and analysis.

    Who knows, maybe Amazon will push the model away from the subsidized device model and to one where the carrier focuses on differentiation via the quality of the network.

    This reminds me of an article I wrote several years ago,, “Beware of the Unforeseen Competitor”

    The premise being that one sector’s core business is just an extension for another sector’s business. As such, we are seeing brands extend into areas that would have been unheard of years ago.

  2. The Wall Street Journal reports that Amazon and its Asian suppliers are already testing smartphones with displays of four to five inches.

    According to the Journal, the Amazon smartphone could go into mass production as soon as the end of this year or early 2013.

    This isn’t the first time we’ve heard rumors about an Amazon smartphone. Earlier this month, Bloomberg also reported that Amazon had partnered with Foxconn to develop a competitor to the iPhone and Android phones. Mark Mahaney, an analyst at Citigroup, also previously wrote that Amazon was working on a smartphone.

    The market for smartphones is rapidly expanding with demand particularly strong in China and other emerging markets where many people are replacing their traditional cellphones. Research firm IDC expects global smartphone shipments to grow 38.8% this year to 686 million units.

    While Apple and Samsung together account for about half of the world’s smartphone shipments, the market is becoming more crowded with an increasing number of Chinese handset makers selling inexpensive smartphones.

Leave a Reply

Your email address will not be published. Required fields are marked *

I accept that my given data and my IP address is sent to a server in the USA only for the purpose of spam prevention through the Akismet program.More information on Akismet and GDPR.

This site uses Akismet to reduce spam. Learn how your comment data is processed.