How Will Amazon Change the Smart Phone Market?

How Will Amazon Change the Smart Phone Market?

By undercutting and differentiating from rivals, of course

It's been an interesting rollercoaster ride since Apple created the modern smart phone market with the iPhone. In just seven years, this market has moved quickly to the same basic situation we see in the PC market, with hordes of low-cost (in this case mostly Android-based) devices dominating a smaller but still successful market for Apple devices. So what can Amazon add to this mix, and why would this firm be poised to enter the smart phone market?

We might look to the Amazon Fire TV as a reference point. (Check out my aptly-named article, Amazon Fire TV, for an overview.)

Fire TV was a late comer in a market with established rivals such as Roku 3/Roku Streaming Stick, Apple TV, Chromecast and even more expensive entries like Xbox One/Xbox One with Kinect. It offers all of the expected functionality like access to multiple online streaming services, a nice remote control, and of course integrated Amazon services for photos, music and more.

But the key to Fire TV, like any other product, is how it differentiates from the competition. Here, we see niceties, like auto-registration with your Amazon account, but also some big differences, such as voice control (in which you use the remote control like a hand-held microphone, surprisingly effectively), parental controls (which is coming soon) and Android game compatibility, in which many games also work with a separate Fire Game Controller, letting this $99 set-top also take on much more expensive video game consoles.

My opinion of Fire TV notwithstanding, Amazon's ability to clearly differentiate its set-top box from the competition should help it overcome some of the issues with being late to market. But what about the smart phone market that Amazon is allegedly about to enter? What can it do there?

I expect an Amazon smart phone to provide the obvious stuff, just as Fire TV does in its market. That is, it will be Android (or at least Amazon's AOSP variant), will tie-in tightly to the Amazon digital ecosystems, and will be available fairly cheaply (I'm guessing $200 to start) in contract-less form. I'd be surprised if it wasn't multi-network capable (AT&T, Verizon, etc.).

But thanks to an Amazon teaser video in which various people are interacting with a device that is never shown, we can start to speculate on how Amazon might truly differentiate the device.

All of the people react to whatever they're seeing in fairly over-the-top ways. Filtering out the nonsense responses—"That is awesome, "Oh ... wooh," "Woah!" and the like, there is only one obvious hint as to what's happening. "It moved with me," one person says. And two women in the video are seen moving their heads around as they watch the off-screen device that is presumably following their movements in some way.

There are further clues. On the registration page for the announcement event for this coming device (see below), the following key items come up:

Amazon is interested in app developers.

They are specifically interested in app developers that have used gyroscopes, accelerometers, or other device sensors in their apps.

There is some new type of sensor.

Machine learning is part of it.

There are rumors that Amazon's smart phone might use a 3D display. This could indeed explain a lot of the stuff we see in the video and in the notes above. That would be something.

And I suppose I should at least mention the obvious: It might not even be a smart phone. How disappointing would it be if there were about some silly Fire TV accessory?

Well, you can find out for yourself. On June 18, Amazon is hosting an announcement event in Seattle for this new secret device, whatever it is, and everyone is invited. Well, sort of. Just visit the Amazon web site and register for an invitation. Yes, app developers are preferred. 

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