April 14, 2014
Amazon will unveil a phone in June; water is still wet
by Dustin Kurtz
Amazon is set to ship their first smartphone in September, according to the Wall Street Journal. Other breaking news; the Earth continues to orbit the sun, puppies remain cute, and your mother wishes you’d give her a call sometimes, she worries, the least you could do is let her know you’re alive.
Greg Bensinger and Evelyn M. Rusli write for the Journal that the internet’s premier vendor of medicated butt wipes and, reluctantly, books, “has been demonstrating versions of the handset to developers in San Francisco and its hometown Seattle in recent weeks. … People briefed on the company’s plans have been told that Amazon aims to announce the phone by the end of June and begin shipping phones by the end of September, ahead of the holiday shopping season.” Rumors of an Amazon phone have been around since 2011, but the evidence seems far more concrete this time.
This news follows hot on the heels of an Amazon announcement of a set-top Roku competitor, and their acquisition of online comics retail giant Comixology. Unlike those products, however, the market for phones is incredibly saturated with some entrenched heavyweights, and breaking in anywhere, even with Amazon’s readymade landing page sales platform, will be tough. Apple, for instance, has a 43% marketshare in the U.S., but significantly less than that abroad where it is far outsold by cheaper competitors. There seems to be more room for a variety of phone manufacturers in the U.S. now that in previous years, but elbow room is still scarce. Even Windows hasn’t been able to grab more than about 5% of the market. All of which is to say that this is a particularly ambitious move, and one that—presuming Amazon aims for their usual shockingly low pricepoint—is sure to lose them money in the short term. Also, water tends to run downhill, fire is ouchy when you touch it, and scorpions make terrible earmuffs.
AT&T provides wireless contracts for Kindle devices, so Amazon phone contracts will likely go through them as well.
Bensinger and Rusli write:
Because consumers carry smartphones with them everywhere, Amazon would gain access to data like users’ locations and app downloads, which could help generate new sales opportunities for e-books, video downloads and items like household goods.
A smartphone may also open up new avenues for mobile payments, a nascent market dominated today by rival eBay Inc.’s PayPal. Amazon is targeting a summer launch of a program to use Kindle Fire tablets as checkout registers at smaller brick-and-mortar merchants, people familiar with the plan told The Wall Street Journal earlier this year.
Amazon already harvests valuable and highly creepy data about reading and watching habits from all Kindle users. They would, of course, love to see your location just as readily and constantly. In addition, doughnuts are delicious, porcupines are not to be hugged, and everyone you’ve ever known will, someday, die.
According to Pew, only about 9% of adults in the U.S. read an e-book on their phones last year. There’s no reason that should jump much in the near future, even if Amazon manages to corner some of the phone market. Amazon’s goal here is, as always, not about the devices or about individual sales. It’s about locking people into the Amazon ecosystem. And in this case in particular it’s about expanding the front lines of their ongoing war with Google and Apple. It’s pretty uncertain that Amazon is entering the phone market to make a phone that is more useful for reading books, or to make a better phone at all. What is certain: the Earth is amazingly spherical, history is written by the winners, coffee is a gift from a benevolent god, and they’re building these phones to make you into a better Amazon customer.
Dustin Kurtz is former marketing manager of Melville House.