Why it is sensible for Amazon to Launch a Smartphone

Smartphones – Amazon’s Next Forte?

By: Guest Contributer – Tom Clark

Amazon.com has announced its plans to launch a smartphone raising a lot of speculations from market analysts and technology mavericks. According to the latest report from Bloomberg, it is confirmed that Amazon plans to collaborate with Foxconn, a Chinese firm that makes the Apple iPhone to manufacture an Android-operating smartphone. The report did not reveal the timeframe for the arrival of Amazon’s smartphone in the market. Although Amazon is a successful online retailer with a huge market share, its move to launch a smartphone has been received with a lot of speculation. However, the company’s move is very sensible due to a number of reasons.

Smartphones and money
Amazon cannot ignore the growing trend of people relying on their smartphones to access content on the internet. This is not likely to change any time soon and any company ignoring this is doing so at its own peril. Smartphones are the next big thing in defining online commerce and communication. Amazon strategy aims at tapping into this ripe market and making money out of it. According to market survey by Ovum, it is estimated that manufacturers will be shipping approximately 1.7 billion smartphones annually by 2017. It is believed that android will be leading the pack, so it quite tempting for companies, such as Facebook and Amazon to enter the smartphone market.

Winning customers
Amazon has loyal customers and already has a following on its digital ecosystem. Amazon is hoping to achieve the same success with the smartphone as it did with its Kindle Fire Tablet.

The company is expecting that customers will be receptive towards the Amazon smartphone as they were towards the tablet. It sold the tablets at a cheaper price and this made it compete considerably well with the Apple iPad in term of sales. Amazon strategy is not targeting to make profits directly from the sale of its smartphone, but through customers buying its digital content, such as music, magazines, e-books and movies. It is hoping to replicate the success it achieved with its Kindle e-book.

Easier access to Amazon content
A smartphone will complement the currently available Amazon ecosystem. It will enable people to easily access Amazon e-books, movies, TV shows and music. Unlike the kindle fire tablet that is sometimes left at home, people will carry their smartphone everywhere in their purse or pocket. This means that they can access Amazon movies, music and e-books while commuting on a train, waiting for someone in a restaurant or when relaxing at home. There are many apps that are exclusively designed for the smartphone, making it easy to access a lot of online content.
Marketing channels

Amazon will not go it alone in launching the smartphone, but it is likely to get help from mobile service providers, such as Sprint, Verizon and AT&T. This is because these service providers will be granted a higher negotiating power by the increase in mobile devices competition. Also, Amazon already has a solid and powerful outlet it can utilize to market and promote its phone to the customers. It will also make quite an impact in the smartphone market if it subsidizes the price considerably.

Tom Clark is a freelance writer, professional blogger and social media enthusiast. His blog Satellitedish.org  focuses on Internet service providers. You can follow him on:

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