Amazon mobile device likely, analysts say

Alex Walls
April 26, 2013

Technology analysts are picking that Amazon has aspirations to become a major mobile device company.

Managing director Victor Basta said the company would look to fuel its retail and book sales, and find new ways of engaging with (ie enticing) its credit card using customers.

Basta said the firm believed Amazon had serious aspirations to be a major mobile device company, and expected to see Amazon accelerate its efforts in mobile devices.  He said Amazon came at the market from e-retail origins, and were on a trajectory to build the next Apple from a different, non-hardware direction.

Evidence of Amazon’s move was already available, he said, in the company’s purchases of companies in the mobile sphere, including an image matching startup SnapTell, a text to speech offer IVONA Software, a touch screen specialist Touchco and more.  It also had partnerships with mobile providers through its Whispernet 3G wireless plan, he said.

“Even Inspector Clouseau would not have difficulty working out that Amazon is a business with a deep interest in being a serious mobile player.”

Ovum principal analyst Adam Leach said mobile was a direction that many big technology companies such as Amazon, Google and Microsoft were heading.

Amazon already had its Kindle line, including the multimedia device the Kindle Fire, which made use of a mobile operating system, Android, and the company had already dipped its toe in using a contract manufacturer, designing the system software to run on it and using it to drive their digital services.

“It’s not really much of a leap to think that they’re going to look at the smartphone market and feel they’re going to do the same thing with that.”

Offset device cost with retail or content sales

He said the company could be fairly disruptive in the smartphone market, by offsetting the retail sales or digital content sales against a device’s cost price, such as with the Kindle Fire.

“Using that model in mobile would be very disruptive and could be a good way for them to gain momentum in mobile.”

Basta also said the company was already comfortable with the idea of offering high quality, low cost devices, selling the Kindle Fire at a loss.

“The prize for Amazon is in commercialising its content and it is way ahead of Apple in this.”

Kindle Fire branding

While it was quite likely we’ll be seeing an Amazon mobile handset, probably with Kindle Fire branding, when we would see it was more difficult to define, Leach said.

“I wouldn’t say it’s imminent but I wouldn’t be surprised if they made such a move within the next 12 to 24 months.”

Amazon had its own distribution channels and could subsidise the handsets itself without appealing to operators, Leach said.

“It could be quite an interesting distributor to the market.”

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