Amazon has shown plans to release a new Amazon smartphone soon. Although not much specifics have been mentioned, rumor has it that the new phone will be sporting a 3D display which could help them with market penetration. The question now is: why does Amazon want to enter a totally new industry that?s already packed and has very stiff competition? The answer is actually relatively simple. Amazon is staying true to what they do best, to sell things to consumers. They just want to build another platform that has access to more and more users so that they can put their products online for consumers to buy.
The idea is quite smart, actually. Amazon currently has a few hardware related devices that they are selling namely the Kindle E-reader, the Kindle Fire, and the Amazon Fire TV. These three devices sell moderately at best and don?t necessarily translate to a lot of revenue for Amazon. Amazon though is willing to go that extra mile because those devices aren?t the end game for their business. The end game is to actually get customers to buy from Amazon. The main purpose of all those devices is to give you access to Amazon related things so that you want to purchase them. You don?t need to associate Amazon with the other premium hardware developers like Apple but you know that Amazon, at its core, is a business that lets you buy things. At the end of the day, their core business will still be for consumers to check out their wide ranging online catalog that features physical books, eBooks, Movies, Games, TV shows, and Music.
This strategy isn?t actually too different from what Google does with their software. Everyone knows that Google comes up with free stuff and services like Android and Gmail and they get their revenue by selling custom tailored ads to recoup the cost. This translates to massive revenue for Google. Amazon?s strategy is mainly the same only that they are using devices instead. Even if they end up losing a bit of money for those devices, if they get enough people to purchase their products and services, they can still earn a significant amount.
Don?t be surprised if the new phone from Amazon comes out cheap. It could very well be a standard low to mid-range smartphone that is optimized to lead you to Amazon?s product catalogs and services as fast as possible. It?s a smart and sound strategy and could very well work in favor of Amazon.
Photo Source: Amazon website
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