And, what else would Amazon call it? Regardless of the name there are plenty of good reasons why the world’s largest online retailer should eschew an own branded smartphone. Although these arguments are easy to agree with, there is one avenue of attack open to Amazon by which the Kindle Phone could change everything.
MarketWatch quotes Colin Sebastian, a respected analyst with Robert W Baird & Co, who is highly critical of the idea that Amazon is working to create and sell a smartphone.
“Tablets make sense for Amazon, but a phone does not,” said Sebastian, adding that tablets “skew more heavily toward media consumption than smartphones, they are a natural fit for Amazon’s commerce and media platform.
“We believe that the smartphone market is inherently more challenging, costly, and fraught with risk as compared to the tablet market,” he continued.
He goes on to enumerate and illuminate the reasons. That said, it all reads rather like the arguments made in 2006 and 2007 against Apple entering the smartphone market.
Kindle Phone as Change Agent
Fundamentally, it is hard to disagree with Sebastian and other critics of the rumored Kindle Phone, but there is one avenue of attack that could change everything — Amazon could become an MVNO (mobile virtual network operator), buy one or partner closely with an existing virtual carriers.
Amazon’s approach to the Kindle and Kindle Fire — good enough hardware and software — would carry over to the Kindle Phone. The giant online retailer has proven its ability to deliver cheap devices, made from off-the-shelf parts that are designed to satisfy rather than wow.
And, that way of thinking applies in spades vis-a-vis MVNO carriers and contrasts favorably with Verizon and AT&T’s exorbitant pricing and restrictive plans. Further, by taking the MVNO route, Amazon could avoid big carrier control of the Kindle Phone’s delivery, features and, just as importantly, software update schedule — a real sore point for Android devices, which the Kindle Phone most certainly would be.
When you look at ways to ameliorate the difficulties of creating and delivering a Kindle Phone, the hoped for synergies — more customers using a shared ecosystem of software, hardware and services — weigh heavier in the balance.
Amazon should price the whole deal — Kindle Phone + service — either free with a shorter, perhaps 18-month, contract and $99 for pay as you go.
And, lastly, this isn’t a new idea for Amazon — the company is already an MVNO in Japan. That said, the time could be right for Amazon to shake up the US smartphone market.
An Amazon Kindle Phone matched with custom MVNO services could change the smartphone business as boldly as the iPhone did…
What’s your take?