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Apple won't lose sleep over Amazon's Fire Phone

Gregg Keizer | June 19, 2014
No one at Apple's headquarters will be losing sleep over whether the new Amazon Fire will snatch market share from the iPhone, analysts said.

History is also on Apple's side.

"Amazon entered the tablet market in the fall of 2011 with the Kindle Fire, which was dubbed by the media as the 'iPad killer,' but we have found the impact to Apple has been almost non-existent," said Brian White of Cantor Fitzgerald in a note to clients after Bezos wrapped up. White ticked off other moves by rivals — from Google's Nexus smartphones and tablets to Microsoft's Surface 2-in-1 — that have failed to move the needle against Apple.

In the same note, White predicted that Apple would be "unfazed" by the Fire Phone and that Amazon's entry is more about "media buzz than a realistic threat to Apple."

"The real question for Amazon is whether they can get enough traction, even a few percentage points," said Baker. He didn't see that share coming from Apple.

That leaves Android.

"The play is against Android," said Gottheil. The Mayday service is a bigger differentiator from the Android experience than it is from an Apple experience," he argued, talking about the Fire Phone's one-button access to a live technical support representative. "Apple doesn't have tech support standing by like that, but it does have a better customer service experience than Android overall."

But for all the analysts' assurances, isn't there at least a chance that Apple might respond in some way to the new competition? Milanesi didn't think so.

"No, Apple doesn't really react," she said. "[After all], there's always something new [from rivals]. Maybe by the time the next iPhone comes in we might see something [as a reaction], but Apple almost always sticks to their strategy. They tend to keep to their own path and not get distracted."

And from what the experts could see, Amazon's Fire Phone failed to generate any meaningful distraction, or disruption.


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