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    Jun 20, 2014

    Will Amazon phone Fire up market? Maybe not


    AMAZON.COM has packed its new Fire Phone with image-recognition tools to make it easier for users to purchase items online. But Amazon's chief executive, Jeff Bezos, may need more than that to get customers to pay up for the handset.

    Mr Bezos on Wednesday introduced the Web retailer's first foray into smartphones, with 3D 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.

    Yet this may not be enough for the device to overcome a challenging market dominated by Apple and Samsung Electronics, with most of the growth coming from low-cost phone makers in countries like China.

    While the Fire Phone gives Amazon a way to put its Web store and other services directly in front of consumers, the gadget will be available only on AT&T's network from July 25 and costs US$199 (S$250) with a two-year contract, the same as Apple's iPhone and Samsung's Galaxy.

    It also won't be immediately available internationally, where Amazon's services aren't as robust.

    "I was underwhelmed on the price," said Carolina Milanesi, an analyst at Kantar. "The new features are interesting, but people are going to need to be convinced."

    Said Julie Ask, an analyst at Forrester Research: "It's interesting, it's newsworthy, but I didn't see something that we didn't know was possible three or four years ago. It's going to be an uphill battle for Amazon."

    The Fire Phone's introduction continues Amazon's evolution from online bookseller to global technology titan.

    The world's largest online retailer has introduced a variety of consumer electronic devices, including e-readers, tablets and TV set-top boxes, as a way to propagate its online store and digital services to customers.

    At an event on Wednesday in Seattle to unveil the Fire Phone, Mr Bezos said he had been asked for years when Amazon would have a phone, and he 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 and Google's app stores, and instead put its services at the centre of the Fire Phone.

    "There's a place for it," said Oliver Wintermantel, an analyst at International Strategy & Investment Group in New York, referring to the 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, 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.