Amazon Fire Phone 'different', says Jeff Bezos, analysts see either a dud or 'magic wand for shopping'

Jun 20 2014, 14:34 IST
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Amazon CEO Jeff Bezos introduces the new Amazon Fire Phone in Seattle. (AP) Amazon CEO Jeff Bezos introduces the new Amazon Fire Phone in Seattle. (AP)
SummaryThere are two ways to view the smartphone, called Fire Phone, Amazon introduced to the world: It's either the latest in a long line of indistinguishable devices or a magic wand for shopaholics.

comes with 32 gigabytes of memory, double the standard 16 GB. It also comes with 12 months of Amazon Prime, the company's free shipping, video, music and book subscription plan, which normally costs $99 a year.

''This is a very aggressive price point for a premium phone,'' Bezos said.

The new device fits with Amazon's broader aim to create a more efficient shopping experience while steering more consumers to its retail products.

''It goes back to the mission of Amazon, which is to sell you stuff,'' said Ramon Llamas of the research firm IDC. ''It reduces the number of steps it takes to buy things on the phone.''

Fire also comes with a 4.7-inch screen, suitable for using with one hand, and earbuds with flat cords and magnets that are designed to eliminate tangles.

Persuading consumers to buy the Fire over an iPhone or Samsung phone will be tough, analysts say, particularly because Amazon isn't offering price breaks the way it has with Kindle tablets. And sophisticated technology such as 3-D will appeal primarily to early adopters of technology.

''The technology's cool, but consumers don't buy technology,'' said Julie Ask, an analyst at Forrester Research. ''We buy solutions. We buy services. We pay for things that make our lives easier.''

Charles Golvin, founder of Abelian Research, believes the phone will appeal mostly to people who already use Amazon services heavily.

''Any loyalist of iPhones or Google is going to have to judge whether there's enough value in what Amazon is offering with Fire to make the transition,'' he said.

Samsung and Apple dominate worldwide smartphone sales with a combined 46 percent share, according to IDC. And in the U.S., Apple leads with more than 37 percent, with Samsung at nearly 29 percent.

Amazon could succeed even if it doesn't steal market share from the top phone makers. Michael Scanlon, managing director with John Hancock Asset Management, said success will be measured by whether Amazon can increase loyalty among its Amazon Prime members and get them to boost purchases.

Amazon is giving Fire owners a free year of membership, which normally costs $99, and existing subscribers an extra 12 months of membership. Prime offers free two-day shipping, encouraging impulse purchases. It also offers free access to some movies, TV shows, music and books and could encourage consumers to buy additional content, once they are used to the offerings.

Meanwhile, Firefly could

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