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  • Do We Need Another Smartphone Platform?

    June 24th, 2014

    It has been rumored for several years, and last week, Amazon announced their first foray into the smartphone business. But unlike existing Kindle products, it is not being sold at or near cost. Instead the Fire Phone costs very much the same as the iPhone 5s and the Samsung Galaxy S4, which portends a decent profit. When it ships, you'll be able to buy one with an AT&T contract for $199, or without a contract for $649. Yes, it comes with a standard 32GB storage, compared to 16GB for the other smartphones, which may make it a somewhat better value.

    The theory, of course, is that people who buy Kindle gear would be more inclined to buy stuff from Amazon, thus producing enough extra revenue to cover the cost of selling cheaper hardware. But the Fire Phone is clearly meant to earn its keep, even if you include the cost of the extra storage, which isn't substantial. I'm sure it's obvious to most of you that Apple and other hardware makers seriously overcharge you on higher capacity smartphones and tablets.

    No matter. The Fire Phone runs on a seriously altered version of Android, and thus exists in its own ecosystem. If you switch, you will get a product that's tailor made to access Amazon's storefront. You may even be pleased with the Dynamic Perspective feature, offering tilt, auto-scroll, swivel and such.

    Some of this reminds me of similar features in the Samsung Galaxy S4 that simply failed to work. Until Amazon's smartphone is available and is fully tested, I won't assume any of these extra features are as bad as Samsung's implementation. But the perspective feature sort of reminds me of what Apple did with iOS 7, a feature that was roundly criticized by some, and thus forced Apple to deliver a way to shut the thing off for those who complained about feelings of dizziness or nausea when tilting their iPhones or iPads.

    Overall, however, it's not that the Fire Phone is offering must-have features that would persuade customers to choose it over an iOS or Android handset. Even if you're a loyal Amazon customer, you can use their iOS or Android apps to check out products and make purchases. The Fire Phone's interface, at first glance of the published reports, doesn't strike me as so unique that it necessarily presents an all-new or even reasonably altered perspective on what you can get now. Even the hardware doesn't seem to be necessarily any better than your typical high-end Android handset.

    At least if you don't like the iOS or Android way of doing things — and they are similar in many respects — you have Windows Phone. That's decidedly different, and, to some, a better way. But I say some, since Microsoft's mobile platform hasn't done very well compared to the market leaders.

    Certainly the Fire Phone doesn't seem the sort of device that necessarily attracts switchers, particularly those who are heavily invested in another app ecosystem. It'll take years — if ever — for Amazon's app storefront to become as substantial as the others are now. But for someone entering the market for the first time, particularly if they are heavily invested in buying stuff from Amazon, it might be a practical alternative.

    This doesn't mean Amazon was wrong to introduce a device that competes with the other products they sell. They make take the position that it doesn't matter so much in the end. Whatever product you buy from their sprawling online catalog, they get paid, and profits are larger when they build it. While the Fire Phone will surely get a decent amount of coverage for a while, particularly when complete reviews appear, I just wonder whether it'll vanish from everywhere but Amazon's home page after a while.

    It doesn't help that Amazon made a deal with just one wireless carrier — AT&T. That may have made sense for Apple in 2007, with an unproven product in a new category. More important, Apple required full control of the interface and the software, something the carriers had never granted. Only the smash success of the iPhone made it possible to extend that deal to hundreds of other carriers around the world over the next few years.

    Amazon is starting from scratch. The real question is whether they can make a difference, or whether it's just too late for a new contender to get into the game. By not discounting, perhaps Amazon is still taking baby steps to see where the product goes. By restricting availability to a single carrier, they have more control over the sales process, and do not have to worry about building alternate versions, or even a large quantity of handsets. Perhaps Amazon is just testing the waters to see if there's real demand for a new smartphone platform.

    Of course, Amazon doesn't reveal sales of existing Kindle hardware, and the educated guesses are all over the place. Clearly they are sufficient to carry on, but I wonder if the Fire Phone is trying to fill a demand that doesn't really exist in sufficient quantities to make sense.



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    4 Responses to “Do We Need Another Smartphone Platform?”

    1. Monotonous Langor says:

      The world doesn't need a Bilderberger Bezos Phone.

      Gene Steinberg Reply:

      @Monotonous Langor, Well the world will decide soon enough.

      Peace,
      Gene

    2. DaveD says:

      I'm wondering if and when AT&T will do a price markdown like the HTC First, "the Facebook phone." A $0.99 Fire Phone would be a big bag of hurt.

      Gene Steinberg Reply:

      @DaveD, If Amazon wanted to go cheap, they could have taken the same pricing approach as the Kindle products. They chose not to. But I agree a lot more product would move if it were free or nearly free. Time will tell whether anyone cares about the Fire Phone beyond some loyal Amazon customers.

      Peace,
      Gene

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