Whether Amazon Smartphones Run Android Remains to Be Seen
Silva expects that the phone's technical features and the operating system's version won't be the most critical parts of the product to Amazon. Instead, he said, "putting content front and center will be more important." The focus will be on finding new ways of presenting the Amazon online shopping experience to customers. "It will probably be a shopping type of device" that could help make it even easier for consumers to shop with Amazon, said Silva."It's easy to understand why Amazon would want to do that," Benedict added. "The Kindle Fire lets you read books or watch movies" and they want to continue with that. Even more important, Benedict said, is that Amazon's new phones could allow online Amazon storefront partners to target their offerings to phone users based on their geographic locations collected through the phones. "I wouldn't be surprised if they came out with a smartphone that is free or nearly free" just because such information would be hugely helpful and ultimately profitable to allow one-touch ordering of anything that Amazon sells, Benedict said. "Thats going to offer more value to anyone that already uses Amazon as a storefront. I really think its the location-based services that are really the ultimate purpose for Amazon wanting to go with a smartphone." For Amazon, the phones themselves won't even have to be cutting-edge or feature-rich, according to Benedict. "The phone just needs to be adequate. It doesn't need to outsell anything else. "They're not going to try to be Apple, and they're not going to try to be Google. They're just going to try to give users great value." Amazon could even tie the new phones into the popular Kindle line by branding them as Kindle Phones, said Benedict. "I wouldnt doubt that they continue the Kindle brand with a Kindle Phone. Then it would really become an e-commerce platform that is so convenient that people will want to use it." The potential for other Amazon-branded products is wide open, he said. "It's probably just the tip of the iceberg today." The move into smartphone territory, currently dominated by Apple and Samsung smartphones, would be a natural extension of Amazons strategy with the Kindle Fire, which runs a modified version of Googles Android operating system. It remains to be seen whether Amazon will use Android for a smartphone device. Google Android continued to grow its share in the U.S. smartphone market, accounting for 50.9 percent of smartphone subscribers, while Apple captured 31.9 percent, according to a recent study by IT analytics firm comScore. Samsung was the top handset manufacturer overall with 25.7 percent market share.
Benedict, of Netcentric Strategies, said he eyes the potential entrance of Amazon into the mobile handset market as a way of bolstering the adoption of its very popular Kindle devices. "There have been a lot of companies that have tried and failed at smartphones," he said. "The fact is that [Amazon] wants to be seen front and center as a media company. It has less to do with a phone. They want to be an outlet for media" that the company can sell on the devices.