Apple will suck the air out of the room tomorrow after its 10 a.m. press event, where it is expected to unveil new phones and even a wearable device.
That’s why Amazon’s announcement today that it has lowered the cost of its first phone to 99 cents doesn’t go far enough if it really wants to compete against the iPhone-maker. In fact, the price drop doesn’t even scratch the surface if Amazon wants to disrupt the market and grab consumer attention.
Back in June at the phone’s launch event, the Seattle retailer proudly showed off the phone’s magic tricks, bragging how you can navigate through services on the phone using dynamic perspective technology, and how a service, called Firefly, allows you quickly find and identify books, DVDs, songs, phone numbers, art and much more.
But the e-commerce company turned hardware-maker stopped short of disrupting what really sucks about mobile phones: The bill.
Over the past year, we’ve seen how T-Mobile has nearly turned itself around by making somewhat small tweaks to how we shop and pay for phones and cellular plans. Amazon should steal a page from the carrier’s book if it really wants to become a dominate player in the mobile industry.
Typically, it’s Amazon’s strategy to offer hardware at low prices in order to attract more customers and eventually have them purchase content via Amazon. A lower phone bill would have been a valuable new service that would have encouraged this pattern.
Months ago, rumors had circulated that it was considering a Prime Data plan, which would reportedly mimic AT&T’s “Sponsored Data” plan, which allows customers to use certain apps and services without affecting their monthly data cap. However, the company didn’t announce anything of that nature, and instead offered phone buyers a free year of Amazon Prime, it’s two-day shipping service that has expanded in recent years to include free streaming video, and free streaming music.
The Prime Data plan was in hindsight a poorly sourced rumor, or maybe it is still in the works. But for now, the company is tied up in an exclusive partnership with AT&T, which severely limits its potential customer base to one of the four U.S. carriers. (Internationally, Amazon announced today the Fire Phone was now available for pre-order in the UK and Germany with exclusives at O2 and Deutsche Telekom, respectively.)
Part of the problem with the Amazon Fire Phone is that Amazon had to decide four years ago what would be earth-shattering today. That’s difficult to master under ordinary circumstances, much less when you are developing your first-ever device. If it had instead focused on an innovative pricing plan that could have stood up in any environment against any new hardware from the dominant companies, such as Apple and Samsung, we would be seeing different results today.
Rather, the outcome of its hard work has been mediocre reviews of the handset and potentially worse sales.
The first sign sales weren’t going well is when the Amazon Fire Phone plummeted on the company’s own list of bestselling electronics across Amazon.com, and more recently, when estimates pegged sales at no more than 35,000 during its first 25 days on the market — representing one for nearly every four employees currently working at the e-commerce giant.
After all this said, however, the company is unlikely to give up.
Amazon Kindle VP Ian Freed told GeekWire that it won’t be going down without a long, hard-fought battle. “We are completely 100 percent dedicated,” he said. “I spent four years of my life on this.”