On Kindle Phones

Due to the holiday week Book Friday is temporarily suspended and will resume next week.

Two articles, one at CNET and one at Wired, describe new products rumored to be released by Amazon in the coming months. The CNET article describes the possible tablet releases this fall by Amazon while Wired focuses specifically on the Kindle Phone rumors that have been making the usual rounds since last fall. While the new tablet rumors are intriguing, including updates like 4G, cameras and high-resolution displays, it's the phone rumors that are most compelling.

The Kindle Phone (if one is released) will be important for a couple of reasons. First, it will be a fourth major competitor in the smartphone market. Windows Phones haven't sold a lot, but Redmond's research division is helping drive innovation and Amazon will do the same. Apple and Google aren't enough to keep the development of smartphones moving forward on their own, they need other major developers to push the envelope and drive the market forward.

Second, it will be the first major phone release to be directly tied to a major retailer. The friction for purchasing new products will be reduced dramatically on a Kindle Phone. Buying more coffee or diapers will be as easy as pointing your phone's camera at the old package and clicking the "Buy" button. The phone could have friction reducing features such as the ability to analyze your buying habits and see that you buy coffee once every two weeks and ask if you'd like to set up a recurring order. Amazon wouldn't be selling a phone so much as a retail store.

As a result, expect to see an extremely low price for unlocked Kindle Phones directly from Amazon. They wouldn't need a subsidy from the carriers, they'd subsidize it themselves by encouraging users to do their shopping on Amazon.

Amazon is a trusted hardware manufacturer now. They've helped create an entire new category of devices (e-ink readers) and survived the launch of a brand new tablet line. Consumers are willing to buy Kindles, many are willing to buy several.

Amazon has the most important part of their ecosystem, the content, in place. They deliver books, music and movies on all of their devices and on third party devices as well. They seem to be ready for the final piece to complete their hardware lineup: the smartphone.

 

Andrew

 

Reading:

Leviathan Wakes, James S.A. Corey. Page 243/582