Amazon.com packed its new Fire Phone with features such as an image-recognition tool so people can quickly purchase items from its online store. Jeff Bezos may need more than that to get customers to pay up for the handset.
Amazon's chief executive officer introduced the web retailer's first foray into smartphones, with 3-D viewing, audio- and image-recognition technology, as well as features such as unlimited storage for photos and a year of free membership to its Prime fast-shipping programme. The Fire Phone, which will be available July 25 with AT& T as the exclusive wireless carrier, will start at US$199, the company said yesterday.
Yet that may not be enough for the device to overcome a challenging market dominated by Apple and Samsung, with most of the growth coming from low-cost phone makers in countries like China. While Fire Phone gives Amazon a way to put its web store and other services directly in front of consumers, the gadget will only be available on AT&T's network and at $199 with a two-year contract costs the same as Apple's iPhone and Samsung's Galaxy. It also won't be immediately available internationally, where Amazon's suite of services aren't as robust.
“It’s interesting, it’s newsworthy, but I didn’t see something today that we didn’t know was possible three or four years ago,” Julie Ask, an analyst at Forrester Research, said. “It’s going to be an uphill battle for Amazon.”
The Fire Phone’s introduction continues Amazon’s evolution from online book seller to global technology titan with its hands in a growing number of businesses. The world’s largest online retailer has debuted a variety of consumer electronics devices, including e-readers, tablets and TV set-top boxes, as a way to propagate its online store and digital services with customers.
Success on mobile is also essential because people are moving more of their digital lives to smartphones and away from traditional personal computers. Use of Amazon on PCs in the US fell to 42 per cent in May from 55 per cent in March 2013, according to an Enders Analysis survey. Engagement through smartphones was flat at 32 per cent.
At an event yesterday in Seattle to unveil Fire Phone, Mr Bezos was undeterred. He said he had been asked for years when Amazon would have a phone, and waited until the company could roll out something unique.
“You have to be patient, you have to work at it and you have to obsess about the smallest of details,” Mr Bezos said.
The opportunity for Amazon remains a large one, especially if the company can get away from having its app as just one among hundreds of thousands on Apple's and Google's app stores and instead put its services at the centre of the Fire Phone. According to researcher IDC, the number of smartphone users worldwide is quickly approaching 2 billion. The devices generated sales of $338.2 billion last year, up 21 per cent from 2012, according to IDC.
“There’s a place for it,” said Oliver Wintermantel, an analyst at International Strategy & Investment Group in New York, referring to Fire Phone. “The phone will serve to fulfil one thing and that’s having people spend more time and money on Amazon.”
Like other Amazon hardware products, the company is selling the device at near cost and aims to make money when people use it to buy other items using the gadget, according to Ian Freed, vice president of Fire Phone. Customers can expect more hardware from Amazon, he said.
“We’re not going to stop with this phone,” Mr Freed said.
Fire Phone will join Amazon’s ecosystem of devices so that when a consumer is watching a movie using the company’s set-top box, the phone can pull up the actors and other information about what’s being viewed through the IMDB service that is owned by the Web retailer. The smartphone will also give customers access to Amazon’s “Mayday” technology-help service.
The handset’s image-recognition technology, called “Firefly,” will let the device figure out what a customer is looking at so the user can buy the item online. It can recognise more than 100 million items, with consumers simply taking a picture of a book, DVD or other product to link back to Amazon’s store. The phone will also have audio recognition for movies and TV shows, which Amazon also carries.
Firefly poses another threat to brick-and-mortar stores, which have seen more of their customers buy items online. With the image-recognition technology, a version of which Amazon and other companies have already offered through mobile apps, can let customers use a retail store as a showroom for shopping online.
The 3-D technology, which shifts screen images to create the illusion of depth and changing perspective on the smartphone’s display, will work on apps like maps or when shopping through Amazon’s store, the company said. It will also create a more immersive experience for programs like games. Motion detection in the phone also lets people scroll through Web pages and books, or quickly access certain features by tilting the device.
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