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Amazon's Fire phone is 'Prime' example of customer first

Matt Hamblen | June 19, 2014
With its new Fire Phone, Amazon is primarily interested in connecting to its 250 million Amazon and Prime customers with a phone that makes it quick and easy to shop over the Web.

Amazon's Fire smartphone will be available through AT&T starting July 25. A version with 32GB of memory will cost $199 and a 64GB version will cost $299 with a two-year contract.

With such capabilities, a Fire user can quickly comparison shop and make purchases right from the phone. AT&T Mobility CEO Ralph de la Vega, who appeared onstage with Bezos at the Seattle event, said Firefly's "only danger is clicking one too many times to buy things."

Amazon has also armed its new Fire with a Mayday button, which has been used in the Kindle Fire HDX tablet since it was introduced eight months ago. The Mayday button provides users with video access from the device to customer support within 15 seconds. Any problems with AT&T's LTE network will be handed off by the Amazon service tech to AT&T right away, de la Vega said.

But analysts said the technology features won't stand on their own.

"On first inspection, Amazon's Fire phone is breaking new technological ground with Firefly, Dynamic Perspective and numerous UI differentiators, but most North Americans already own a smartphone... and this will be a very tough sell," said Patrick Moorhead, an analyst at Moor Insights & Strategy.

Moorhead said the $199 on-contract price needs to be less, especially when compared to the iPhone 5S and Samsung Galaxy S5 at similar prices. The free Amazon Prime offer "doesn't mean much, given Amazon is going after a new market," he said. If customers had wanted Prime, they'd have it already, he said.

"It's important to note that this Fire phone doesn't have to win the competitive battle with the iPhone or Galaxy," said Jeff Kagan, an independent analyst. "That's not the purpose. The purpose is simply to give customers more ways to buy stuff from Amazon.com, as with the Kindle."

Ask said Amazon may deem its Fire phone a success even if it doesn't take any sizable share of the smartphone market from iOS and Android.

"They can define success as learning more about their customers who use Prime," she said. "Prime users will spend more. Amazon will know where users go to shop, what apps they get, what videos they watch. That creates better intelligence to better serve customers."

Amazon had little choice other than to introduce a smartphone, Ask and others said. "Hardware features aside, Amazon is too big of a player to be represented by just an app or two," Ask said. "A smartphone platform gives them more insight about customers and reduces the friction for those impulse sales moments. Amazon's actually not the first to have dreamed up these hardware features."

 

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