I've been waiting with interest to see what the long-rumored 'Amazon smart phone' would look like, and how it would compete with established standards such as Apple's iPhone or Samsung's Galaxy offerings. The new phone certainly seems to offer a similar technological experience, with some interesting quirks and features, but the price . . . that worries me. Amazon could have chosen to be genuinely competitive on price, but instead elected to position its smart phone in line with the high end of the market. Personally, I think that was a serious mistake. It's just another 'gee-whiz' device in a market filled with them - or, at least, the promise of them (many don't live up to the hype).
Consider the alternatives that are currently available. The smartphone market is now saturated. Instead of spending hundreds of dollars for a device, or getting it cheaper when buying it with a contract for service (which is also expensive), consumers can elect to buy a much cheaper smart phone from prepaid service providers such as Virgin Mobile or Straight Talk. Walmart even offers an Android smart phone for the latter service for under $30 - the clearest sign yet that the smart phone boom, where consumers could be conned into paying way too much for a device, is winding down. They've now become just another consumer device.
Furthermore, by partnering with just one mobile phone service - AT&T - Amazon has shut out many of its customers who already have contracts with other suppliers. I'm not an AT&T customer, and considering the absolutely appalling customer service I've experienced at the hands of that company in the past, the last thing that interests me is submitting myself once more to their
Another factor is the current state of the economy. I think Amazon could have wiped the floor with its competition if it had introduced a phone to match the low end of the market at a killer price, perhaps including certain freebies that the competition could not match (for example, its music streaming service or bundling a reduced-cost Prime membership with the phone). No-one would expect it to give a year of free Prime membership with an economy phone, but it has enough marketing clout that it could probably have made a lower-end unit an attractive option in other ways. If it had been 'unlocked', able to be used on any network, or sold in conjunction with existing service providers so that it could be piggybacked onto their networks, I think that could have been a huge seller. However, it's chosen not to do so - and I think that's going to limit the company's market penetration. It's just another player now. (Amazon may have plans for a cheaper phone later, but that's not clear at this stage.)
I'm not alone in wondering about this aspect of the Amazon Fire phone. Matt Warman points out:
The Fire Phone is all about driving consumers to buy more from Amazon ... it’s above all a gateway to Amazon itself. In a world where Google and Apple are endlessly trying to persuade customers to buy films and TV and apps from them, Amazon figures it will be easier for them to break in, because they are the place where many consumers already buy films and TV programmes that they either watch on other devices or get delivered through the post. None of this is to say that Amazon is assured of any serious success, and its business model usually depends on selling cheap devices at wafer-thin margin on such a scale that the process is viable. This could yet be a project that meets a quick death.
I agree with him. I find this launch more puzzling than exciting. Why did Amazon choose to go this route instead of a more consumer-friendly option? That's not what I expected from the company, and I'm not sure they made the right decision. I'm a pretty loyal Amazon customer, spending thousands of dollars a year there, but this is one product I won't be buying in its present form or at its present price.