Categories: AdvertisingMobile

Amazon Gets Its New Smartphone Strategy Right

After the debacle that was the Fire Phone, Amazon is back in the smartphone business with what appears to be a winning strategy. Instead of developing their own devices, at significant expense, Amazon is partnering with manufacturers to replicate their Kindle and Fire tablet ad-serving, subsidized-hardware approach in addition to pre-loading the companies commerce and consumption apps. So they end up with a similar sort of footprint in this space from a far smaller investment. And, on the flip side, their smartphone partners (initially Blu and Motorola) secure a new and potentially meaningful distribution channel. The only potential fly in the ointment is they’ve started with low- to mid-end devices and it’s unclear (to the casual observer) what the “Prime” demographic might prefer. Amazon’s intent is, likely, also to expand Prime’s reach by making these phones exclusive to the $99/yr program.

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  • Makes you wonder what Amazon might due with their Fire TV platform... Go down the Roku path? Give Fire TV Stick to Prime Customers? Do it like the Dash button in allowing Prime members to buy the Stick but getting credited back when buying Amazon VOD? More importantly (for me) - when's a NEW Fire TV stick gonna appear? That 1st gen one is like TiVo-slow.

  • I can see some takers for cheaper ad-supported phones (although I'm not sure how likely such folks would be to pay $99 a year for Prime, so yeah, maybe a demographic mis-match there, as you suggest). If you're willing to go with a cheaper ad-laden phone, you're probably not shopping for a pricey high-end flagship phone anyhow, hence Amazon only rolling out low-to-mid-range phones so far on this program.

    I'm guessing we'll see new Fire TV hardware of some sort this fall. The 2nd gen box came out last Oct. and the stick came out in Nov. 2014. Given the competition the Fire TV Stick is getting from the much more powerful new Roku Streaming Stick, I would think they'll have to update it before the holidays.

  • Seems to me that the importance of the phone to Amazon at this point is to extend the success of Echo and the Alexa AI. As much as people like it, it'll lose ground to Siri and Google if it's not available everywhere. That said, I don't expect them to have much success with their second kick at the can. Nobody needs an Amazon phone.

Published by
Dave Zatz