Amazon’s Making a Smartphone? Here is Why that Makes a Whole Lot of Sense

By: Hillel Fuld (@hilzfuld)

If you have been following the mobile tech space this week, you probably noticed that there is not much going on. No, really. Since Google IO and WWDC, things are pretty quiet. And when there is quiet in the tech space, you know what that means. Rumors!

Well, besides the obvious iPhone 5 rumors, the latest talk is about a possible Amazon phone to go head to head with the iPhone and Android devices. Bloomberg reports “Amazon is developing a smartphone that would vie with Apple Inc’s iPhone and handheld devices that run Google Inc’s Android operating system, two people with knowledge of the matter said.”

Amazon is seeking to complement the smartphone strategy by acquiring patents that cover wireless technology and would help it defend against allegations of infringement, other people with knowledge of the matter said.”

OK, so these are rumors from people with knowledge on the matter. We got it.

But Amazon? A phone? Really? Before I explain why this makes so much sense, let me remind you that you can replace that question with the word “Apple” back in 2007! Everyone had what to say about Apple entering the mobile space and that includes important people, including the CEO of Microsoft, Ballmer who famously ridiculed Apple for even trying. Yes, really. See the video below.

Anyway, I am sure Ballmer is kicking himself for that laughter now, so before you write off Amazon as a mobile player, here are five very real reasons that an Amazon phone makes so much sense.

All the Cool Kids Are Doing it

Take a step back for a second out of your iPhone or Android-dominated world and think about this objectively. Apple was a computer company. Google was a search company. Microsoft was a computer operating system company. None of these were RIM, Palm, Nokia, or HP, all mobile giants of the last decade.

Now take a look where all those giants are and where these non-mobile companies are. Need I go on? Fine, I will!

So we are used to Apple, Google, and even Microsoft being recognized as leading mobile players. But, if you were paying attention last week, you might have heard about another company throwing its hat into the race. Mozilla, the makers of the popular Firefox browser and the email client, Thunderbird (RIP) are now working on their own OS and even their own smartphones.

I think at this point, it would be news-worthy if Amazon, such a leading player in the digital space would NOT be entering the mobile space with its own offering. This is the obvious next step for the entire mobile industry.

Mobile UX is King

OK, everyone is doing it but what does Amazon know about mobile? Well, Amazon may not be a mobile player just yet, but you know what Amazon does better than anyone? UX. Think about the online shopping experience and how dominant Amazon has become. You know why that is? Because Amazon offers the best overall experience including best prices, fastest and most efficient overall experience, and most importantly, Amazon has a reliable brand in the space.

Now, the need for a solid user experience is magnified when we are talking about a small screen on a mobile device that consumers use to consume content, surf the Web, and here is the kicker, buy things! Mobile payments is a beast of an industry right now and who is more natural of a player to lead this revolution then the company that led it on the Web and created a real and undisputed dynasty?

You Know What Else is King?

So cliché, I know but really. What are smartphones good for if not to consume content in massive proportions, right? I mean whether we are talking apps, books, movies, music, etc. etc. Amazon’s got it. The Kindle Fire was just a taste of what Amazon can offer, but the reality is, when it comes to content, Amazon is in a better place than almost all other players, with the possible exception of Apple.

“The Cloud? Yea, We Got That!”

iOS 6 is filled with cloud integration, Android is pretty much all in the cloud, and yet, the leader in the cloud computing space, Amazon is nowhere to be found? I mean, really?

This is such an obvious advantage, that again, it would be ridiculous for Amazon NOT to release a phone. Again, the integration with Amazon services this phone can offer can only be compared to the Apple model of hardware and software playing nicely together. The potential is truly endless and Amazon has to know that.

The One Mobile Patent to Rule Them All

OK, in today’s world, you cannot talk about mobile without talking about patents. Apple is suing Google/Samsung for patent infringement in the Galaxy Nexus. Google owns one of the widest patent portfolios via Motorola and if you think they will not leverage that against Apple, you are kidding yourself. Meanwhile Nokia is suing Apple and Google and winning (Nokia makes money on every iPhone sold. No, really.) And the list of law suits goes on and on. And on.

Well, Amazon is no Motorola or Nokia when it comes to patents but the E-commerce giant has one patent Apple would die for. The famous one click patent. Amazon users can make purchases with one single click. Now think what that means for a phone. This can become the ultimate mobile shopping tool with built-in price comparisons and one click purchase. Of course, the on-phone shopping experience of content will be both comfortable for the consumer and profitable for the developer and Amazon itself. Really, the possibilities of one-click purchasing on a mobile phone are again, endless. Amazon HAS to capitalize on that. It just has to.

Bottom Line

Putting aside the reliability of the Bloomberg report, I think it makes a whole lot of sense for Amazon to spread its wings with its own mobile hardware offering. If there is one thing Amazon knows how to do, it is to maximize on potential business opportunities. I don’t think this one will be any different.

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