The Fire Phone doesn’t seem to be doing anything really groundbreaking on the pricing front. It’s $199 with an AT&T contract, which puts it right in the middle of the mobile device pricing structure.
Also, the new phone has some cool 3-D aspects but we do not think it is going to have a big effect on the market. Take for example the Kindle Fire tablet. Those don’t require any contract and are a lot cheaper than the iPad, but what has their impact really been on the market? Amazon sold six million fewer of them this last Christmas season than the year before. Meanwhile, Apple sold 26 million iPads in the same timeframe.
Amazon, which recently started same-day service in LA, has some other issues it’s going to have to deal with:
- Without a contract, it costs $650, which is more than 50% higher than a similar Google Nexus, and almost the same as the well established Samsung Galaxy ($700) or even the iPhone 5S ($750). Amazon sold the Kindle Fire tablet at a much more aggressive price point, and it still is only 2% or less of the tablet market.
- This sucker is heavy! It is the thickest and heaviest of any other smart phone in its price range.
- It does not have a lot of apps, only about 240,000, and many of them are not well rated. Many of the apps also are outdated. By comparison, Apple has 1.2 million apps in its App Store.
Some experts have said that the new smart phone is more than anything, simply an extension of the Amazon online presence. It’s more a way to make buying at Amazon easier, but it’s not really a revolutionary device. Even if it does moderately well, it’s probably not going to be any threat against Apple.
Amazon also has move into other markets recently, with its collaboration with Twitter to sell merchandise, so we will see what happens in the near future with the Fire Phone. Maybe it will surprise us.