What happened to the Amazon smartphone?

Where is that Amazon smartphone

While Amazon CEO Jeff Bezos announced two new Kindle e-readers, an updated to the popular Kindle Fire, and an entire new tablet line under the Kindle Fire HD moniker, one thing was missing from yesterday’s launch extravaganza: a smartphone.

Speculation had been floating for months that Amazon was working on its own smartphone. After all, it seems like a logical step after moving from e-readers to full-fledged media tablets with the Kindle Fire. Yet reports that Amazon would debut a phone at yesterday’s Kindle product announcements proved to be a bit optimistic.

So what happened? As it turns out, Amazon may have skirted the need for one.

The Verizon deal

Verizon Amazon Shopping Apps

Separately from Amazon’s introduction of new Kindle hardware yesterday, Verizon Wireless announced it will be preloading Amazon mobile applications on selected Android devices.Not just a single app, either: Amazon has managed to get a whole passel of its mobile apps onto Verizon phones, including its mainstream Shopping app, along with its Kindle, Audible, and MP3 apps, an app supporting clothing sales through its Zappos subsidiary (smartphone users just gotta have shoes), and its IMDb app. Initially, these will crop up on the Samsung Stellar, LG Intuition, and the new Motorola Droid Razr M. There’s no word on whether the deal with be extended to other Android devices going forward.

Financial terms of the arrangement were not disclosed. We don’t know whether Amazon is paying Verizon to pack its apps into phones, cutting Verizon in on a share of revenues derived from the apps, or perhaps both. But money is almost certainly flowing from Amazon to Verizon, and not the other way around.

It’s easy to dismiss these pre-loaded apps as just-another instance of the kind of “bloatware” that has migrated from the Windows PC industry to Android smartphones: Carriers like to preload phones with selected software as a way to distinguish devices from their competitors’, as well as provide gateways into their own branded (and often fee-associated) mobile services. For many users, they will be just that.

However, for Amazon, these apps also convert those Verizon devices into Amazon storefronts, just like an Amazon phone would do. The deal is about more than being able to read Kindle titles or buy MP3s on the go: With Amazon’s shopping app, users can scan barcodes or take pictures of products while they’re out shopping and immediately pull up listings for the same products on Amazon. And guess what? There’s nothing to stop Amazon from using location information available in phones and undercutting retailers who might just happen to meet or beat Amazon’s prices. The app essentially converts smartphone users into Amazon agents, reporting back to Amazon about retailer’s products and pricing.

Amazon’s mobile apps essentially convert brick-and-mortar retailers into showrooms for merchandize sold by Amazon. See something you like in a store? Snap a picture and order it directly from Amazon. And consumers seem to love taking their mobile phones shopping: according to Nielsen, as of June 2012 a whopping 47 percent of smartphone owners were using a shopping app. Now, at least for some Verizon customers, the odds are going up that that shopping app is from Amazon.

So does Amazon even need a smartphone?

Amazon Phone

The argument for Amazon making the leap to smartphones derives from one simple fact: Far more people have smartphones than e-readers or tablets. At the end of 2011, 470 million people globally owned smartphones, while only 81 million owned tablets. If a company really wants to be a part of consumers’ buying and spending decisions, it needs to be on their smartphones.

In some respects, Amazon is well positioned to make that transition. Amazon is far and away the dominant player in electronic retailing, with a long history and millions of customers worldwide who turn to Amazon first for everything from books and music to tools, home appliances, and even groceries and furniture. Amazon already enables its existing customer base to easily make purchases and tap into their preferred media (music, video, and books) via their smartphones. However, the Kindle Fire brought Amazon integration to another level with a custom Amazon browser and even app store.

An Amazon smartphone could literally move the Amazon media and shopping experience right to the home screen, putting an Amazon-assisted shopping experience right at users’ fingertips, rather than buried in an app. A phone like that could be an easy sell to mobile-addicted shoppers — particularly those who are already members of Amazon’s customer pool. Amazon could attract even more customers through its famous little-or-no-margin pricing . An Amazon phone could sport high-end Android hardware at the price of a mid-level or even entry-level phone — after all, Amazon wants to make its money selling goods and services, not gadgets.

The case against an Amazon smartphone

Google Android Bikes

Of course, shopping and media consumption are far from the only things people do with their smartphones. That might be why Amazon (so far) hasn’t pulled the trigger on the idea.

Creating a customized “fork” of Android for the Kindle Fire tied users deep into the Amazon content ecosystem, while suppressing much of the noise and distraction that comes with a stock Android experience. However, it also came with a downside: no Google apps like Gmail, calendars, contacts, Google search, Google Maps, or even Google Chrome. Amazon’s Silk browser provides a ready substitute for one of them, but the company would need to many more of its own apps to develop a usable smartphone.

Amazon doesn’t have it’s own Web search, it’s own mapping, or its own email service. It would either have to roll its own (which is time- and resource-intensive: just ask Apple) or partner with existing players. It won’t be able to partner with Google or Apple, so that largely leaves Microsoft as the most logical partner for email and search services. For mapping, Amazon could try to make a go with OpenStreetMap, or make a deal with Nokia, whose Navteq subsidiary is one of the most robust and mature players in the industry.

Those kinds of partnerships would cost Amazon money — especially since, in the case of Microsoft and Nokia, Amazon phones would be competing against the Windows Phone platform. That, in turn, would drive up the cost of a hypothetical Amazon smartphone, making a it more difficult to hit a low price point and undercut the existing Android smartphone market.

Should Google be worried about Amazon?

Google CEO Larry Page

In the wake of Apple’s $1 billion court victory over Samsung, many industry watchers have been thinking of Apple as Android’s biggest enemy. After all, the late Steve Jobs regarded Android as a stolen product, and vowed to go “thermonuclear” to destroy it.

However, with Amazon, Google may face a serious threat from within its own ranks. If Amazon plays its cards right, the company could conceivably subvert the existing Android ecosystem and make Android a vehicle for its own services, rather than Google’s.

After all, Amazon’s content ecosystem is far more mature than Google Play. Amazon has its own forked version of Android, its own Web browser, its own app store, and it’s now producing hardware cheaper than Google’s own Nexus 7 tablet, and still on par with it. Amazon’s Kindle Fire is arguably the most successful Android tablet to date — Amazon claims its first Kindle Fire accounts for 22 percent of the tablet market, though it has declined to offer sales figures.

Now, Amazon is now inking deals with carriers to put Amazon’s retail and shopping offerings front and center on smartphones, displacing things like Google Shopping. If Amazon can continue to push its content and shopping ecosystems onto smartphones through carriers like Verizon, the rumored “Amazon smartphone” may remain exactly that — just a rumor.

Product Review

Alexa, annoy my neighbors! The Echo Sub brings the boom you've been missing

Amazon’s Echo Sub is aimed at Echo speaker owners looking to inject some room-moving bass into their smart speaker experience. We quickly learned that it’s a niche product, but one that does its odd job extremely well.

Google will start charging Android manufacturers to use its apps in Europe

Google announced that it will be charging Android device manufacturers in Europe a licensing fee to use its apps and services. The announcement comes as an effort to comply with new European Commission regulations.
Home Theater

PlayStation Vue: The master guide to Sony’s internet TV service

PlayStation Vue is Sony's answer to live TV without the need for a cable or satellite TV subscription. To help you understand the service, its plans, and numerous features, we've created this handy guide.
Smart Home

Google is porting some Home Hub features to other smart displays

Google is proud of its new Google Home Hub, but in a surprise move, it's bringing many of the features associated with the new device to all the Google-enabled smart displays in its ecosystem, as well as some competing devices.

These are the best LG V40 ThinQ cases to stop unsightly damage

The LG V40 ThinQ is the latest entry in LG's long line of great V series phones, but it's not invincible. The best way to protect it from potential damage is with one of the best LG V40 ThinQ cases.

With Spotify for WearOS, you no longer need your phone to stream music

A Spotify app will soon be available for download on Wear OS smartwatches. Whether you're working out or lounging at home, you'll soon be able to access and control your music straight from your wrist.

Goodbye, Essential? Android creator’s startup cuts nearly a third of its staff

Essential has cut as much as 30 percent of its workforce, suggesting that it may be in more trouble than previously thought. The news comes a few months after the company reportedly canceled a follow-up to the Essential Phone.

The best Xperia XZ3 cases to keep your new Sony phone shiny

The Xperia XZ3 is a great phone with powerful hardware, a capable camera, and a lovely glass design. But glass is fragile, and can be broken. Here are some of the best Xperia XZ3 cases to prevent that.

We toured the Google Hardware Store pop-up in New York: Here’s what it’s like

To show off its slew of new products, Google is opening up pop-up shops in New York and Chicago starting October 18. You'll be able to buy products -- such as the Pixel 3 or the Google Home Hub -- at the Google Hardware Store.

The Verizon GizmoWatch puts a quick-communication device on your kid’s wrist

Verizon is taking another shot at building a smartwatch for youngsters. The company announced the Verizon GizmoWatch, which boasts 4G connectivity and helps parents keep track of their children.

Here’s how to buy the new Google Pixel 3 and Google Pixel 3 XL

Google finally unveiled the new Google Pixel 3 and Google Pixel 3 XL, arguably the best Android phones currently available. Now that they're official, you might be wondering how to get them for yourself.

The LG V40 ThinQ has five cameras and is now available on Verizon

LG has finally taken the wraps off the new LG V40 ThinQ, the company's latest and greatest flagship phone that packs a whopping five cameras. Here's how to buy the new LG V40 ThinQ.

Key settings you need to change on your brand-new Google Pixel 3 or 3 XL phone

Google's Pixel 3 and Pixel 3 XL smartphones are now available. If you've set the phone up, we've rounded up a handful of key settings we think you should tweak or turn on to get the most out of your new device.

Next week, Xiaomi will announce a phone with 5G and 10GB of RAM

Xiaomi will announce the Mi Mix 3 smartphone on October 25, and according to the company's spokesperson, it will be capable of connecting at 5G speeds and feature 10GB of RAM -- two world firsts.