Amazon Smartphone Might Miss the 2012 Holiday Sales Rush

 
 
By Todd R. Weiss  |  Posted 2012-07-12
 
 
 

Amazon Smartphone Might Miss the 2012 Holiday Sales Rush


The rumored smartphone line being undertaken by e-retailing giant Amazon.com could launch with a potential disadvantage: If they are built, the smartphones may not be available for sale until after this year's holiday sales season.

That's because the timeframe for the start of production of the new devices is "late this year or early next year," according to a report in The Wall Street Journal.  Those estimates come from officials at some of Amazon's parts suppliers who asked to remain anonymous, according to the report.

If the production of the devices themselves doesn't begin until late this year, it's unlikely that they could be ready in time for sale during the 2012 holiday shopping season that starts officially on Black Friday following Thanksgiving.

Amazon's plans for a smartphone offering in the crowded mobile marketplace were reported last week by Bloomberg, which quoted two unnamed sources who had knowledge of the plans. Amazon€™s low-cost Kindle Fire shook up the tablet market upon its release in November 2011, and now the company looks to be going after Apple€™s best-selling iPhone smartphone with its own smartphone.

Two IT industry analysts disagree about whether a launch that misses the 2012 holiday shopping season will be an issue for Amazon's rumored smartphone offering.

"I don€™t think so," said Chris Silva of The Altimeter Group. "Just from watching day to day, it looks like we're in sort of a fever pitch for phone releases. It used to be two- to three-year cycles for hardware refreshes. Now it's more frenetic," which means it's not so important for sales at a certain time of year anymore. "Any event to line up sales is OK for technology" nowadays, he said.

Kevin Benedict, the CEO and principal analyst at Netcentric Strategies, disagrees, saying that missing the holiday sales season would be a disadvantage for Amazon with its new handset. 

"It would matter because if you historically look at the sales of everything from iPhones to iPads, Christmas is a huge time for sales," said Benedict. "If they miss Christmas this year, they'd be missing an opportunity."

While details of the rumored smartphones are still sketchy, Silva said he presumes that they will run the Google Android operating system, since that's the OS Amazon already uses on its Kindle Fire tablets.

"With the Kindle Fire running an Android derivative, it will be interesting to see what they do with the phones," said Benedict.

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.

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.

"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. "That€™s going to offer more value to anyone that already uses Amazon as a storefront.  I really think it€™s 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 wouldn€™t 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 Amazon€™s strategy with the Kindle Fire, which runs a modified version of Google€™s 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.

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