First the Kindle Fire, and now the Kindle Phone?

[Eug]

I must admit, I didn't see this one coming, but I suppose it does make some sense. Amazon has had success with the Fire, in a market that Google had no real presence, and one that Apple didn't directly tackle either. Going after the phone market is going to be tougher because there are lots of decent Android phones out there and there's of course the iPhone too. However, the Fire now has a good reputation so perhaps that can be translated into a success in the phone market as well.

eg. 4.3" phone with decent reader capability, accessing all the same content that the Fire does, directly.

Certainly with the Fire, Amazon is much more confident in themselves than they would have been a year ago. I wonder if they can hit the Xmas market.

Bloomberg: Amazon Said to Plan Smartphone to Vie With Apple IPhone

Amazon.com Inc. (AMZN) is developing a smartphone that would vie with Apple Inc. (AAPL)’s iPhone and handheld devices that run Google Inc. (GOOG)’s Android operating system, two people with knowledge of the matter said.

Foxconn International Holdings Ltd. (2038), the Chinese mobile- phone maker, is working with Amazon on the device, said one of the people, who asked not to be identified because the plans are private. Amazon is seeking to complement the smartphone strategy by acquiring patents that cover wireless technology and would help it defend against allegations of infringement, other people with knowledge of the matter said.

A smartphone would give Amazon a wider range of low-priced hardware devices that bolster its strategy of making money from digital books, songs and movies. It would help Chief Executive Officer Jeff Bezos -- who made a foray into tablets with the Kindle Fire -- carve out a slice of the market for advanced wireless handsets. Manufacturers led by Samsung Electronics Co. and Apple shipped 398.4 million smartphones and other mobile devices in the first quarter, according to researcher IDC.

 

[SunnyD]

It's all fine and dandy... but what I really want is independence from the big 4. That's right - Why am I paying for all the content, the hardware to display the content AND the pipes to get that content to me? Oh, and by the way, if you want more of the content you bought than we allow you to normally access in a month, you have to pay extra for it.

If someone like Amazon wants me to own a phone to push their content to me, which I pay for, they better be paying for the pipe too. I'm sick of this shit.

 

[Puddle Jumper]

I don't see why anyone would get this over a regular Android or iOS device.

 

[SunnyD]

I don't see why anyone would get this over a regular Android or iOS device.

Price and price alone.

This is amazon... they are going to severely undercut the market to build share. You're going to get an upper-mid level class smartphone for peanuts. Think something (if it were to come out today) about like an SGS2 for about $150, no contract. You think it won't sell at that price?

 

[lothar]

Price and price alone.

This is amazon... they are going to severely undercut the market to build share. You're going to get an upper-mid level class smartphone for peanuts. Think something (if it were to come out today) about like an SGS2 for about $150, no contract. You think it won't sell at that price?

Verizon, AT&T, Sprint, and T-Mobile are under no obligation to accept an Amazon Kindle Phone to their inventory.
Why would any one pay $150-$200 for a Kindle phone when most people in America sign $200 contracts to get the latest iPhone or Androids?
I don't see how Amazon can compete here unless they release $100-150(which will be a PoS phone at that) phones and sell them to prepaid carriers.

Whatever Amazon is trying to do may work in Europe, Asia, and Canada. However, I don't see how it would work here in USA where almost everybody signs contracts.

 

[Puddle Jumper]

Price and price alone.

This is amazon... they are going to severely undercut the market to build share. You're going to get an upper-mid level class smartphone for peanuts. Think something (if it were to come out today) about like an SGS2 for about $150, no contract. You think it won't sell at that price?

Not in the US where most people would be comparing it to a One X or Galaxy S3 for roughly the same price.

The main thing the Fire had going for it was it is cheap. The stock software isn't very good and the app store is lacking compared to the Play Store.

 

[Red Storm]

I'm sure they'll manage to sell, but I know I'd never, ever get it.

 

[gorcorps]

Verizon, AT&T, Sprint, and T-Mobile are under no obligation to accept an Amazon Kindle Phone to their inventory.
Why would any one pay $150-$200 for a Kindle phone when most people in America sign $200 contracts to get the latest iPhone or Androids?
I don't see how Amazon can compete here unless they release $100-150(which will be a PoS phone at that) phones and sell them to prepaid carriers.

Whatever Amazon is trying to do may work in Europe, Asia, and Canada. However, I don't see how it would work here in USA where almost everybody signs contracts.

You're not in the right mindset. You have to remember, the main hardware companies need to make their money on the device alone. Amazon has their own app store and their own book store, and has shown several times over that they'll sell the hardware near or AT cost and have enough faith that they'll make the money from software. It's entirely possible that Amazon will offer a fairly nice device at low cost to get people on their system. It'll be a phone that will be sub $200 off contract and damn near free on contract if they wanted to be tied to a carrier. You can't put Amazon in the same vein as Samsung because they're not expecting money from the same place. On the same hardware Samsung will have to charge a premium to make their money, and Amazon will charge cost and get money from their app and book sales.

 

[Puddle Jumper]

You're not in the right mindset. You have to remember, the main hardware companies need to make their money on the device alone. Amazon has their own app store and their own book store, and has shown several times over that they'll sell the hardware near or AT cost and have enough faith that they'll make the money from software. It's entirely possible that Amazon will offer a fairly nice device at low cost to get people on their system. It'll be a phone that will be sub $200 off contract and damn near free on contract if they wanted to be tied to a carrier. You can't put Amazon in the same vein as Samsung because they're not expecting money from the same place. On the same hardware Samsung will have to charge a premium to make their money, and Amazon will charge cost and get money from their app and book sales.

The problem is plenty of good phones can already be had for free on contract, I've seen the Galaxy S2 i77 advertised for free several times and lesser known phones like the Lg Nitro are always cheap.

 

[Eug]

I think those who already own content via the Kindle Fire may be more willing to buy a Kindle phone, esp. if the OS skin is smooth and familiar. It's not just about the hardware.

 

[SunnyD]

Verizon, AT&T, Sprint, and T-Mobile are under no obligation to accept an Amazon Kindle Phone to their inventory.
Why would any one pay $150-$200 for a Kindle phone when most people in America sign $200 contracts to get the latest iPhone or Androids?
I don't see how Amazon can compete here unless they release $100-150(which will be a PoS phone at that) phones and sell them to prepaid carriers.

Whatever Amazon is trying to do may work in Europe, Asia, and Canada. However, I don't see how it would work here in USA where almost everybody signs contracts.

You're missing the point though.

My point is, and as 36% (I think that's the published number of US prepaid growth this last year) of the US market this year has shown, US consumers are getting increasingly annoyed with the incumbent post-paid phone market.

What is amazon trying to sell when it sells the Kindle Fire, or presumably this phone? Prime and other related services. Subscription services.

Start putting dots together...

- Amazon has already had a device that offered a cellular connection at no additional "monthly" cost.
- MVNO's are springing up like flies. Granted, most of them are riding Sprint's network, but there are well established MVNO's riding VZW, AT&T and TMo that have some reasonable pricing tiers. It isn't out of the question that a company with the kind of money that Amazon has can't get favorable rated from ATT or VZW.
- Amazon has a built-in subsidy method already through Prime. Will it be enough to offset the costs of being an MVNO? Who knows. Is it enough to offset "subsidize" the cost of both hardware and service to disrupt the market, at least initially? You bet.

All the dots are there, the question is whether amazon is trying to be disruptive to the entire ecosystem or just particular segments (ie: hardware) of it. They can easily do it all at this point. The question is for how long and how effectively before someone (Google, Big 4, Apple, etc) see them as a legitimate threat to the established business model.

 

[vi edit]

It's all fine and dandy... but what I really want is independence from the big 4. That's right - Why am I paying for all the content, the hardware to display the content AND the pipes to get that content to me? Oh, and by the way, if you want more of the content you bought than we allow you to normally access in a month, you have to pay extra for it.

I posted about this a while back. Amazon already has some kind of relationship with cell carriers. They had free 3G service available to Kindle's. It's not a massive leap to think that they could take it another step and apply it to a phone/tablet. There are a *LOT* of people out there who are not using more than a gig of data a month. Imagine being able to get a decent phone for $200 with no contract and then getting a 1 gig data & voice bundle through Amazon for $20 a month.

 

[SunnyD]

I posted about this a while back. Amazon already has some kind of relationship with cell carriers. They had free 3G service available to Kindle's. It's not a massive leap to think that they could take it another step and apply it to a phone/tablet. There are a *LOT* of people out there who are not using more than a gig of data a month. Imagine being able to get a decent phone for $200 with no contract and then getting a 1 gig data & voice bundle through Amazon for $20 a month.

See the post right above yours. I pretty much spelled this out for everyone else and how it could/should play out.

 

[Eug]

Just a little perspective.

When people talked about Apple intro'ing a phone, the RIM types laughed. Same about Google. Now look at where Apple and Google are.

When Apple intro'd the iPad, the Asus types laughed. Now the netbook market is dead.

Then Amazon intro'd the Fire, and basically beat Google at its own game, literally, since the Fire actually runs Android.

I think Amazon can succeed, if the rumours are indeed true. Certainly Amazon has the ecosystem to support it.

In the very least, I think Amazon has way more chance of succeeding with a phone than Google does with the Nexus Q... but that's not saying much.

 

[vi edit]

See the post right above yours. I pretty much spelled this out for everyone else and how it could/should play out.

Yep, we're on the same page. I've thought for a while that Amazon could go full service MVNO (data & hardware) and totally disrupt the industry.

Biggest question is how do they go about reselling that data/air space without totally pissing off Big Red/Blue...Mediocre Yellow (sprint) and Borderline Meaningless Pink (T-Mobile).

The little guys like Cricket, Boost, Page Plus, ect all seem to cater to young kids/poor people and/or are very regional. They just don't have a big name behind them to push them into larger role.

Straight Talk had Walmart behind it paving the way and that has been much more accepted by subscriptions.

With Amazon pushing a service at rock bottom pricing? Yeah, I think that would seriously disrupt the market.

I don't know how the carriers would react to that.

 

[SunnyD]

Yep, we're on the same page. I've thought for a while that Amazon could go full service MVNO (data & hardware) and totally disrupt the industry.

Biggest question is how do they go about reselling that data/air space without totally pissing off Big Red/Blue...Mediocre Yellow (sprint) and Borderline Meaningless Pink (T-Mobile).

The little guys like Cricket, Boost, Page Plus, ect all seem to cater to young kids/poor people and/or are very regional. They just don't have a big name behind them to push them into larger role.

Straight Talk had Walmart behind it paving the way and that has been much more accepted by subscriptions.

With Amazon pushing a service at rock bottom pricing? Yeah, I think that would seriously disrupt the market.

I don't know how the carriers would react to that.

Honestly, as far as "big" carriers would go, VZW would be the most likely to cut a deal. For a big enough paycheck, VZW would be more than happy to sell off their CDMA network (while retaining full unmetered access/roaming rights on it for their existing subscribers) for someone else to maintain while keeping possession of the towers so that that someone could pay "rent" for the tower space. After all, VZW's LTE doesn't coexist in the same bands as their CDMA networks, so they're complementary technologies.

That's the exact reason why VZW doesn't have too much of a problem with PagePlus taking a bite out of the prepaid market at the prices they do - because VZW is busy migrating everybody they can to LTE. Just look at what they did with the landline business - first came dialup and POTS, then came DSL, then came FIOS and Verizon wanted out of copper completely (see Fairpoint, Frontier, etc). Now VZW is going back after those same markets it didn't upgrade to FIOS with fixed LTE. Tell me why they would want to keep their CDMA technology when they can sell it and write it off just like they did with their copper landlines? It's an asset they CAN sell. And Verizon has never been afraid to whore out it's own sister or mother for a buck.

And Amazon... Bezos, he's not afraid to go after any market in which he sees money. And he's a guy that's creative enough to be able to make money in a market where 99% of the rest of you don't see any possibility to do so.

 

[georgec84]

I don't get the concept of Kindle Phone. Which carriers would offer it?

 

[Dumac]

Carriers are what would make or break this, aren't there?

Just like the Palm and other phones..

 

[SunnyD]

Carriers are what would make or break this, aren't there?

Just like the Palm and other phones..

Essentially, but there are enough cracks in the foundations appearing of the cellular industry right now that this is pretty much the perfect time for Amazon to pull something like this. I mean Amazon, if they really wanted to, could pretty much swallow Sprint whole to make this thing a reality. Deutche Telekom wants to be rid of T-Mo in a bad way, so there's another option right there.

I still think these are "Plan B" options at best. Certainly a nice bargaining chip to get favorable rates from the Death Star or Big Red anyway. I mean even at wholesale rates, it'd still be billions in revenue per year when it's all said and done, and at the end of the day, VZW and AT&T only care about one thing.

 

[Suspicious-Teach8788]

my worry: fragmentation

 

[lothar]

You're missing the point though.

My point is, and as 36% (I think that's the published number of US prepaid growth this last year) of the US market this year has shown, US consumers are getting increasingly annoyed with the incumbent post-paid phone market.

What is amazon trying to sell when it sells the Kindle Fire, or presumably this phone? Prime and other related services. Subscription services.

Start putting dots together...

- Amazon has already had a device that offered a cellular connection at no additional "monthly" cost.
- MVNO's are springing up like flies. Granted, most of them are riding Sprint's network, but there are well established MVNO's riding VZW, AT&T and TMo that have some reasonable pricing tiers. It isn't out of the question that a company with the kind of money that Amazon has can't get favorable rated from ATT or VZW.
- Amazon has a built-in subsidy method already through Prime. Will it be enough to offset the costs of being an MVNO? Who knows. Is it enough to offset "subsidize" the cost of both hardware and service to disrupt the market, at least initially? You bet.

All the dots are there, the question is whether amazon is trying to be disruptive to the entire ecosystem or just particular segments (ie: hardware) of it. They can easily do it all at this point. The question is for how long and how effectively before someone (Google, Big 4, Apple, etc) see them as a legitimate threat to the established business model.

And yet the major carriers continue to report a record number of subscriber growth...

What is Verizon trying to sell with their phones? They don't put bloat on phones for nothing.
vCast...vCast App store(If you've never heard of it before, well now you have and it competes with both Amazon and Google Play)...VZ Navigator...VZ Rhapsody...VZ Ringtones...And their numerous other bloatwares that I've forgotten about.
Verizon sells mp3's, videos, and apps to their customers for $10/month.
They also make some of their customers pay $10/month for VZ Navigator by disabling Google Maps by default unless the user is smart enough to do a workaround.

Most MVNO's are owned by the telecom companies themselves.
Sprint owns Virgin Mobile and Boost Mobile.
StraightTalk, Tracfone, and Net10 are all owned by America Movil, which AT&T owns a 10% equity stake off(or it's parent company Telefonos Del Mexico).

All this talk about Amazon becoming an MVNO is premature speculation. They are releasing a Kindle phone. That is all we know at this point.

How can Amazon be disruptive to the ecosystem if the carriers don't allow it on their network through subsidization?

 

[lothar]

Honestly, as far as "big" carriers would go, VZW would be the most likely to cut a deal. For a big enough paycheck, VZW would be more than happy to sell off their CDMA network (while retaining full unmetered access/roaming rights on it for their existing subscribers) for someone else to maintain while keeping possession of the towers so that that someone could pay "rent" for the tower space. After all, VZW's LTE doesn't coexist in the same bands as their CDMA networks, so they're complementary technologies.

That's the exact reason why VZW doesn't have too much of a problem with PagePlus taking a bite out of the prepaid market at the prices they do - because VZW is busy migrating everybody they can to LTE. Just look at what they did with the landline business - first came dialup and POTS, then came DSL, then came FIOS and Verizon wanted out of copper completely (see Fairpoint, Frontier, etc). Now VZW is going back after those same markets it didn't upgrade to FIOS with fixed LTE. Tell me why they would want to keep their CDMA technology when they can sell it and write it off just like they did with their copper landlines? It's an asset they CAN sell. And Verizon has never been afraid to whore out it's own sister or mother for a buck.

And Amazon... Bezos, he's not afraid to go after any market in which he sees money. And he's a guy that's creative enough to be able to make money in a market where 99% of the rest of you don't see any possibility to do so.

Verizon filed a lawsuit against the FCC about imposing mandatory data roaming agreements.
Why do you think PagePlus stayed at 100MB/month data limit until recently while Straight Talk and others has been on 2GB data limit for years?

 

[lothar]

Essentially, but there are enough cracks in the foundations appearing of the cellular industry right now that this is pretty much the perfect time for Amazon to pull something like this. I mean Amazon, if they really wanted to, could pretty much swallow Sprint whole to make this thing a reality. Deutche Telekom wants to be rid of T-Mo in a bad way, so there's another option right there.

I still think these are "Plan B" options at best. Certainly a nice bargaining chip to get favorable rates from the Death Star or Big Red anyway. I mean even at wholesale rates, it'd still be billions in revenue per year when it's all said and done, and at the end of the day, VZW and AT&T only care about one thing.

Jeff Bezos won't be dumb enough to buy Sprint or T-Mobile.
You can quote me on that.

How exactly will it serve as a bargaining chip?
So...Amazon will tell Verizon "make me an MVNO and also carry my phone subsidized on your network or else I'll buy Sprint."
I wish Amazon good luck with that.

 

[ringtail]

Surely the companies that want to be the big players have LONG seen that a free pone app download will turn the next 10 inch screen Kindle Fire ito the perfect pdi.

No-brainer, E V E R Y O N E saw that that low-hanging fruit out there...could've had it about 3 years ago except Steve Jobs INTENTIONALLY SUBVERTED AND BLOCKED IT about 3 or 4 years ago.

That WILL come.

Personally, I'm poised to buy stock in whatever company surfaces to serve that OBVIOUS, past-languishing NEED. That'll probanbly turn some current no-name start-up into one of the early entrants into the new field of what will evolve into the new next Apple+Microsoft+Oracle!

 

[SunnyD]

Verizon filed a lawsuit against the FCC about imposing mandatory data roaming agreements.
Why do you think PagePlus stayed at 100MB/month data limit until recently while Straight Talk and others has been on 2GB data limit for years?

PagePlus has introduced a plan with a 2gb data offering on their top tier last year. They have also increased their data allotments on the TnT plans (although not by terribly much, but still they have) over the last year.

On the other hand, ST just recently started allowing BYOD and SmartPhones to use that 2gb on, whereas PagePlus has essentially from day 1. 2gb of data doesn't do crap for you on a feature phone.

Jeff Bezos won't be dumb enough to buy Sprint or T-Mobile.
You can quote me on that.

How exactly will it serve as a bargaining chip?
So...Amazon will tell Verizon "make me an MVNO and also carry my phone subsidized on your network or else I'll buy Sprint."
I wish Amazon good luck with that.

You're missing the point. Amazon won't ask VZW or AT&T to carry a subsidized phone. They're going to provide a subsidized MVNO service and sell one and only one device (well maybe more than one, maybe 2 or so models) directly to customers. These devices won't be offered by VZW or AT&T, they won't be "allowed" on VZW's or AT&T's 'network' (except maybe as BYOD, which Amazon wouldn't care terribly much about).

I never said Bezos would actually buy Sprint or TMo - but the threat of it to get a favorable MVNO contract is a shrewd tool to have in his back pocket and it is an acceptable plan B in my opinion.

And as I just pointed out, if Amazon goes the MVNO route, there's absolutely NO reason, need or way they'll even offer their phone to the incumbent carrier post-paid market. For starters, they wouldn't need to.