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Will Amazon Be Able to Repeat History?

April 19, 2014 | About:

The consumer electronics market has developed a lot in the past few years and players such as Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) and Samsung (SSNLF) have grown as manufacturers. These players have been at the forefront of all the major and minor changes and have changed the game according to their competencies. It can be said that these players define the space. In such a situation it’s very difficult for a new player to enter and conquer the market and this brings us to the online shopping giant Amazon (NASDAQ:AMZN).

After creating ripples in the tablet market, Amazon now confirmed its plans to make its presence felt in the smartphone space – a move that many have been expecting for quite some time now. When the company had introduced its first Kindle tablet at an unexpectedly low price, many of the bigger players of the industry were taken aback and later most of them started following Amazon’s footsteps. The question is, will Amazon be able to repeat history?

Amazon’s strategy with the Kindle tablet was a cleaver one. The company wasn’t looking at huge margins from manufacturing; rather it has its mind set on exploiting the demand for apps. The company made most of it profits by selling apps and this strategy might very well be in play for its smartphone also. In fact, analysts are expecting a lot more similarities between the two Amazon products. Just like the Kindle, the smartphone will be running a highly forked version of Android and will focus majorly on what Amazon has to offer.

Though much detailed input about specifications was not available from the company, there are reports that the online shopping major is going to offer a 3-D display interface supported by multiple front-facing cameras. Even the leaked images of the device are available all around on the web. In fact, there are rumors that the company is working on two different models – one aimed at the premium customers that will sport the 3-D display and the other device that will serve the price-sensitive markets and will be low on specs. It’s not necessary that Amazon will make a device to compete against the iPhone or Galaxy S5 or Nexus 5. Amazon has always defined its own market and had identified the unique traits, looking at what really the users need.

This entire project has a nick name at Amazon and is known as Project Smith. The device that’s supposed to cater to the premium buyers is begin referred to as Duke inside Amazon’s labs. The phone is expected to sport a 4.7-inch display with 720p pixel density. That might not be the best in class, but that surely clears the requirements for a decent smartphone. Under the hood, Duke will be powered by Qualcomm Snapdragon processor and will have 2GB RAM. The device will offer a unique glass-less 3-D interface, though it will actually not be 3-D enabled. The software in play will enable the display to appear to be 3-D.

If you look at reasons for the company to venture in to the smartphone space, you will find plenty. To begin with, the company is going with the flow. Smartphones are the hottest little things around and it was very obvious choice for Amazon since it already has required amount of experience in the space. Apart from this, offering smartphones will mean more customers for the company. Not everyone buys a tablet, but smartphones are something that almost everyone has or intends to have. This way the company will have more buyers for online store, assuming the handsets will come with customized shopping apps.

Another argument for Amazon is that it will have access to huge amount of data related to customer preferences and shopping patterns. In today’s information driven world, having so much data is just priceless. The smartphone is expected to hit the shelves by the end of the year and that could mean some troubled times for some of the biggies. It’s not yet clear how the company plans to price the product. But, looking at the past trends, one can expect the devices to have a decent price tag. So far, from whatever that out about the devices, the offerings look to be well positioned for acceptance and chances that Amazon will again make it big are reasonably high.

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