If we haven't already reached smartphone saturation, we're awfully close. Walk into any AT&T or Verizon Store and you'll find enough to make you dizzy, everything from cheap plastic affairs to fancy high-end offerings from the likes of Samsung, HTC, Nokia, and LG. It's a bit of a zero-sum game--and a rather cutthroat one at that. See also: Amazon phone launch live blog.
But despite a billion units being shipped around the world last year, most manufacturers are swimming in red ink. Take away Apple and Samsung, and barely anyone's making any money in the smartphone racket.
So it would seem that the Amazon phone that will presumably arrive at its June 18 event will barely make a ripple. When even the Galaxies and Ones of the world are struggling to attract new customers, how can a first-time phone maker possibly make a splash?
The minute-long video that Amazon released to tease its big announcement is a good start. It doesn't use any marketing platitudes or superlatives to generate artificial excitement; rather it shows real people reacting to an actual feature--smart money is on the glasses-less 3D interface that BGR reported on back in April. Their expressions don't seem fake or forced, and that's what makes it so intriguing; people are clearly impressed by whatever they're looking at, and it made me want to see it, too.
We've pretty much seen every trick and gimmick that can fit on a 4- or 5-inch screen, but glasses-less 3D is something entirely new--for a phone, anyway. Unfortunately, it's the kind of thing that literally needs to be seen. Simulated pictures or videos won't do it justice, so Amazon is going to need a way to lure curious eyeballs, whether it's through a national retail outlet or some kind of no-risk trial program.
And it's still going to be an awfully hard sell. This isn't an online impulse buy like a Fire TV or even a Kindle Fire tablet. A phone is a commitment, and Amazon is going to have to figure out how to get it in people's hands before they can convince them to buy one--kind of like in that clever video.
But Amazon has one thing going for it: an enormous built-in customer base. Sales are on track to top $100 billion this year according to at least one analyst, and an estimated 20 million of its customers are loyal Prime members who were more than happy to fork over another $20 for the experience when Amazon raised prices in mid-March.
In fact, there was a rumor circulating late last year that Amazon will be targeting these very customers, not only with a new Prime music service, but possibly with the phone itself. It's not so farfetched to believe it could offer its new device strictly to Prime members at a steep discount, even if only for a limited time. The benefit would be two-fold: generating buzz and enticing even more people to sign up for Prime.
If ZTE can sell a Firefox OS phone for $80, Amazon could sell its phone just as cheap (and maybe even cheaper with a healthy dose of Special Offers). Jeff Bezos has built a business model based almost entirely on potential, and the possibility of tens of millions more Prime subscribers is surely worth the gamble.
But even if it has an awesome 3D interface and a sweet Prime price point, would people really rush to buy a phone from Amazon? The products it's released thus far--Kindle, Kindle Fire, Fire TV--are all in its wheelhouse of selling books, music, and movies. And more than Apple or even Google, Amazon mainly uses these devices as vehicles to peddle its wares, even if it means taking a loss on the initial purchase. But a phone doesn't really fit that paradigm.
If Amazon simply wants to get a device into its customers' pockets, maybe it doesn't need to be a phone at all (at least not in the traditional sense). If you strip away telephone functionality, we can communicate just fine on our tablets with things like FaceTime, iMessage, and Google Hangouts, so Amazon doesn't necessarily have to include a dialer app in its new handset to get people to use it.
What if this was more of an ultra portable Kindle Fire than a Fire Phone? And if you're wondering what the killer app would be: How about shopping? Amazon is already the largest Internet retailer by a large margin, and if Bezos is serious about overtaking Walmart in a couple of years, a portable personal shopping assistant could really get that ball rolling.
It's safe to say Amazon will never have a brick-and-mortar shop, but if it could create a sort of virtual showroom app by leveraging 3D technology to let customers browse its products, it might just be revolutionary enough to change the way we approach online shopping. It's already attempted to emulate a more traditional shopping experience with its Widowshop app for iPad, which focuses on casual browsing rather than searching. But a fun interface combined with a Siri-style assistant or MayDay-like customer support could really bring it all together.
Then again, Amazon's phone could be just another cheap hunk of plastic that no one wants.