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Yesterday Amazon's CEO, Jeff Bezos introduced the company’s first smartphone called fire Phone. Taking queues from the popular fire brand Amazon had built from their tablets, it seemed a logical extension of their tablet offering. The questions surrounding the fire Phone have largely been answered.

Does the fire Phone carry an amazingly lower price tag like fire tablets?      No
Does the fire Phone sport revolutionary battery life? No
Is it lighter and thinner than the market flagship iPhone 5s? No

In fact, whether it’s the gimmicky Samsung hands-free type scrolling, or an LG-like 3-D display, Amazon is not offering much in the way of anything new, rather, Amazon is simply showing up to the smartphone party seven years late.

Amazon claims its Firefly technology is revolutionary, but in reality, this has been done already. Recognizing phone numbers or dates on a web page is nothing new — on any platform — nor is the Firefly purchasing technology, which is readily available for the iPhone. The Snapdragon processor is nothing to write home about either, nor the camera, software, weight, size, or well, just about anything.

Perhaps the most inventive technology Amazon demonstrated with the fire Phone announcement was its magnetic ear buds, and the claim of their tangle-less cords. Unfortunately for Amazon, my ear iPhone EarPods stayed in the package for over a year. Looking at the massive aftermarket earphone market, it is safe to say many “recycle” the stock ear buds anyway.

Amazon’s biggest challenge for the fire Phone will be in terms of actual sales. Amazon’s relative success in selling its Kindle fire tablets has not been due to their amazing hardware know-how, revolutionary feature set or device ecosystem. Amazon has sold their fire tablets purely on price. Fire tablets are extremely inexpensive vs iPads or Samsung tablets, yet the fire Phone is no bargain for price shoppers. The fire Phone starts at the premium subsidized price point of $199 with a $299 option, or it can be purchased for $649.

Amazon has priced the fire Phone in Apple’s flagship iPhone 5s and Samsung's Galaxy S5 territory. Yet Amazon’s own history shows it cannot sell hardware unless it is sold well below the competition's price points. Amazon's fire Phone is stepping deep into unknown territory. So far the premium smartphone market space has shown there is no room for anyone but Apple and a few Samsung offerings.

As slow as Microsoft was in attempting to seriously get into the mobile game, Amazon has made those headquartered in Redmond look like lightning fast geniuses. Amazon is stunningly late to the game, and arrived with only another me-too Android smartphone, with virtually no compelling reason for anyone to jump from the iOS or even Android platforms. 

The biggest questions emerging from Amazon's launch is why a smartphone and why now? Amazon’s stock has tumbled the past six months, and unless Bezos is able to show investors how the company can quickly turn a profit, his reign may come to an end sooner than later. The phone certainly broadens Amazon’s ecosystem of devices, and if it can catch on with consumers it may be able to elevate Amazon’s media and advertising quests. But Amazon must be able to sell the fire Phone in the tens of millions to even make a dent in the market. The deck is stacked against Amazon to show any kind of real sale volume any time soon — especially based on what they just offered in the fire Phone.

If the fire Phone does manage to carve out a chunk of market share — at least in the Android world — don’t expect Google to standing on the sidelines cheering them on. Like many Chinese Android phones, Google is nowhere to be found. Android is buried 6 feet deep in Amazon’s remake of the OS, eliminating virtually all of Google’s advertising space, while offering their own app store and media content. Fortunately for Google, fire Phone is likely to fall in line as another feckless wannabe iPhone that can’t demonstrate its value over iPhones or existing Android products.

Will AT&T be able to sell the fire Phone successfully into the head winds of the recently launched Samsung Galaxy S5 and soon-to-launch iPhone 6 in just a few months? Not likely. Proof will be in the soon-to-be expected TV commercials showing AT&T offering Amazon’s fire Phone in a 2-for-1 deal, or at 50% off. Sales following the launch will quickly reveal how well Amazon is doing. Like the kindle product line, don't expect Bezos and company to be revealing sales figures for fire Phone any time soon either.

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2 Comments

  1. lrd555 ~ June 20, 2014 05:35

    Jeff Bezo: another victim of Steve Jobs. #
  2. Aardman ~ June 22, 2014 08:07

    The one takeaway from Amazon's pricing scheme for their new smartphone is that in all likelihood, the low-price strategy used for the Kindle Fire tablet has been, at best, a disappointment. Otherwise why abandon it? The low price of the tablet probably attracted too many bargain seekers who never bought enough amazon junk to make up for the low hardware price. Now, Amazon wants their smartphone customers to self-select under the premise that those who can afford a premium priced phone are more likely to purchase a lot of Amazon swag. Good luck on that Bezos, especially since that was obviously the second choice strategy when you first wanted to get into hardware. Amazon is in a fix. They have trained their customers to expect loss-leading prices -- exactly what the book publishers were resting and for which Amazon got the DOJ to protect their book retail monopoly. Cry me a river, Jeff. #

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