With the Success Of the Kindle Fire, Why Doesn’t Amazon Make a Smartphone?
If content truly is king then there are essentially three major players in the game: Apple with iTunes; Google with Play Store; and Amazon with, well, everything.
Apple doesn’t really sell anything “tangible” through iTunes. Some would argue that they don’t sell anything at all, they simply license things to you.
Google, at least, sells a couple items through their Play Store, but mostly they just distribute software (apps, music, movies, TV shows, etc.).
Amazon, on the other hand, actually sells stuff. They sell everything, not just music and movies and rentals that you download, but actual, real stuff! Let’s face it, physical stuff isn’t going away any time soon, as much as we might want to transition to an all-digital world.
But Amazon knows that digital is the future, so they’ve built one of the most robust digital content storage and delivery systems on the planet. In this regard their only real competition is Google. Then Amazon built a tablet that could let you read stuff that you bought without them needing to ship it to you. Whew! What a cost savings (for them)! They even convinced you to buy the thing that would save them all that money on shipping. That’s pure genius.
Now they’ve got a new “thing” that can play your movies and TV episodes in addition to letting you read your magazines and books on it. It’s selling like hotcakes! But that’s just digital stuff, not real stuff.
With all this tablet success, why doesn’t Amazon have a smartphone?
Tablets are just scaled up smartphones, right? And the “good ones” have various wireless connectivity options built right in. Some even have 3G connectivity. That sounds a lot like a phone to me. The only thing missing? It can’t make phone calls!
Why can’t it make phone calls? I’m not the only one to ask, rumors have been flying which ask that very question. Some have even speculated about whether or not an Amazon smartphone could compete with the iPhone.
But why would they want a phone when they’ve already got a successful tablet? Think about it, where do you take your tablet? Not everywhere. Where do you take your smartphone? Almost everywhere.
Why does that matter? Let’s say you’re out shopping, you find something you like, you scan the barcode with your Amazon Kindle Phone (your Kindle tablet is at home on the nightstand). Your Kindle Phone shows you that you could have the same item delivered to your home in two days for $10 less than what they’re selling it for in the store. Want to buy it now? Sure! Tap a button, and you’re done. It knows your shipping address and it knows your preferred payment method. It’s SO much easier than taking the physical item to the front of the store, pulling out your credit card, paying for it, getting a receipt, then carrying around a bag until you get it home. Who needs any of that?
Does that sound crazy? It sure does — crazy AWESOME! Luckily, crazy loves company. Stephen Schenck had the same idea. If everyone has the same idea…
… why wouldn’t Amazon make a smartphone?
One reason comes to mind: carriers.
Carriers don’t like anything that they can’t control. An Amazon Kindle Phone would need to be controlled by Amazon, without carriers bloating them up, restricting payment methods over their networks, and all the other crap restrictions that carriers place on “their” phones.
I don’t think that’s it. Amazon has seen Google go direct-to-consumers with the Galaxy Nexus. It’s a GSM phone. Pop in your SIM and you’re done. Amazon could do the same thing — carriers be damned.
In my opinion it’s only a matter of time before Amazon does just that. When they do, contracts with carriers will begin to go away, Amazon will subsidize the phone because you buy stuff with it. No more contracts means you only need to get a new SIM to take your phone to another carrier. Carriers will start pricing plans competitively to try and woo customers from their competition. New carriers will spring up since they won’t need large amounts of capital to front the subsidies on phones any more. They won’t even “sell” phones, just SIMs.
It will upset the proverbial apple cart… and it will be glorious.