Can the Rumored Amazon Smartphone Be Groundbreaking Like the Kindle Fire?

By , dealnews Media Editor

While many people are waiting anxiously for a potential new Kindle Fire 2, it seems that Amazon might have another release up its sleeve this year. The Seattle retailer is reportedly testing and developing its own smartphone to be potentially released later this year, as was reported by the Wall Street Journal a few weeks ago. While very, very little is known about what the device will feature, many believe that it will be produced by Foxconn, run a heavily-modified version of Android OS (like the Kindle Fire), and boast a competitive price tag.

These rumors of an Amazon-branded smartphone have surfaced about a year after Amazon released its very popular Kindle Fire, a device that has proven that tablets can be affordable while still being functional and of brand-name quality. Until the Kindle Fire, sub-$200 tablets were the stuff of questionable utility, but now it seems that everyone and their brother company has been trying to create the "next cheap tablet." Google released its Nexus 7, and no doubt countless others will follow suite. Thus, it's no hyperbole to say that Amazon's tablet was a game changer.

But will an Amazon smartphone have the same impact on the industry? We ran through several of the rumored features to see, however informally, if another Amazon device could in fact be as groundbreaking as the Kindle Fire was for the world of tablets.

A Low Price Isn't Enough to Dominate

Tech analysts may be quick to conclude that Amazon could easily rule once again by undercutting the competition on price; the manufacturer could offer a significantly cheaper starting price (with a 2-year carrier contract) than any other Android smartphone.

But is a low price point even that impressive? We routinely see even new-release Android smartphones for free or 1 cent when you pick them up with a new 2-year contract; they may not start there, but they eventually reach this price level, sometimes within mere weeks. The only way Amazon could consistently compete with that is to offer its phone for free always, and not just as a promotion.

There is, of course, a difference between a loss-leader (for example, selling the Kindle Fire at a loss but making up for margins in book and movie sales) and having a bad business model. We thus doubt that Amazon is going to offer their phone for free all the time. However, Amazon could also potentially subsidize the phone without a contract at all. PCWorld suggests that such a phone could cost around $199, sans carrier obligations. This will no doubt entice folks who are weary of being locked in to agreements.

Another possible price strategy Amazon may undertake involves subsidizing the phone's plans. Across the board, and on all carriers, smartphone plans hover in the range of $80 to $100 a month. If Amazon can sell ads on its smartphone and discount the monthly usage fee, they might be onto something. Personally, we'd be OK with seeing a few ads that cut our bill by a couple dollars.

The Apps Landscape Will Be "Curated"

An Amazon smartphone would probably have access to the same "walled garden" apps that are currently in the Amazon App Store. That is to say it would have as many as the Google Play App store, but they would be curated slightly (and we mean very slightly) better. Apps also seem to take a longer time to get ported to their store. By opting for an Amazon phone, you're essentially saying that you don't need to have the latest and greatest apps on the day of release. (Though, if you're an Android fan, you're used to this treatment, anyway.)

The Already-Strong Music Store May Need to Step It Up

Amazon's MP3 Store is arguably the best online, with its frequent and often deep discounts, numerous free credits, and cloud storage for all purchases. So how might this translate to an Amazon phone experience? Just like on other Android devices, you'll probably still have an MP3 Store app on your handset that gives you access to your cloud music for streaming or download.

But this is Amazon's time to step it up and give people a reason to choose their phone. What's to stop them from throwing in a Spotify / Rdio-like music streaming service to boot? They've reportedly already worked out the licensing restrictions from the big music labels. Still, that's wild speculation, of course. At worst you get access to what everyone else does, but at best you might get something awesomely more.

Video Offers an Opportunity to Excel

Currently, no Android smartphones have the ability to stream movies and TV shows rented or purchased through the Amazon Instant Video store. And even though Amazon has very recently given the ability to iOS devices via an app, you cannot make in-app purchases that allow you to start streaming immediately (this all has to do with Apple's "we'll take 30% of that in-app purchase" mandate and Amazon's reluctance to give away money to Apple). But this functionality is available on the Kindle Fire, so it seems likely that Amazon will make this available on a smartphone, too. To not include it would be leaving out an appealing, seamless, streamlined way to purchase and instantly watch video content.

Further, if you're an Amazon Prime member, not only do you get free shipping, but it gives you access to a library (albeit a small one) of free, streaming movies, too. Like they currently do on the Kindle Fire, we assume that Amazon will give Prime members a way to stream that free content to a phone device. If you're a Prime member anyway, free streaming content is a pretty nice perk.

eBook Browsing and Buying Will Be a Breeze

Part of Amazon's strategy for eBook domination was to push a Kindle App to every mobile platform known to man. In that way, they could ensure that not a single dollar was spent on an eBook without the purchaser having to at least consider choosing Amazon. That said, Amazon has arguably made direct purchases on these apps difficult, since Android and iOS take a significant cut of the profits. An Amazon phone would feature a tailored OS and would likely follow the Kindle Fire's model, which is to offer a more streamlined, pleasurable buying experience.

Forget About Bells and Whistles

Since Amazon will probably be keeping an eye on price, we don't anticipate this phone to be tricked out with much glitz, glam, and hoo-hah. Just look at the barebones Kindle Fire; it doesn't even have a camera! It'd probably be silly for any handset maker these days to release a phone that didn't have a camera on it, but regardless, don't expect top-of-the-line hardware. If we've learned anything from the Kindle Fire, it's that Amazon can put out a cheap product that's good enough to be an enjoyable product to use, but isn't going to win any show-off competitions.

What Extras Could They Throw In?

Seeing as how they're OK with loss-leading, maybe Amazon will bundle the phone with a store credit. But would the thought of getting a $25, $50, or maybe $100 Amazon gift card entice you to get an Amazon phone, if you're going to be paying a couple thousand bucks on service, over the lifetime of the device?

So what do you think? Can Amazon bring something unexpected to the Smartphone Party? Or will theirs be just another Android phone? (Though, would you listen to us! We're already talking as if this rumor is true!) Sound off in the comments below.

Front page photo credit: MSN Money
Photo credits top to bottom: PC World,
TechCrunch, and iPhone Hacks

Jeff Somogyi is the dealnews Media Editor. He loves any kind of competition (that doesn't involve "extreme eating.") Read more of his competitive peculations on Google+, Twitter or on his blog.

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