Amazon Ice Phone: Has Amazon Learnt Lessons From The “Fire Phone” Disaster?

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There is no question about it; the Amazon Fire Phone was an unmitigated disaster. The launch and subsequent failure of the Fire phone back in 2014 was one of the most high-profile failures in recent memory. It also served to show just how competitive the smartphone industry had become.

At that point, many would have written Amazon off from the smartphone game. However, it seems like Amazon is determined to have another shot. According to industry sources, Amazon.com Inc. (NASDAQ:AMZN) is reportedly working on a new line of phones under the branding “Ice“. The internet giant may soon start its second innings in the smartphone industry with the “Ice Phone“.

So how is the Ice lineup of smartphones different from the Fire phone? And will the second time be a charm for Amazon as they try to break into the smartphone space? Let’s have a look.

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Amazon Ice Phone: Is It Really Cool?

Right off the bat, it seems like Amazon wants to distance themselves from the Fire phone disaster. This is evident from the name “Ice”, which is the antithesis of Fire. This is not all that different. The Ice lineup essentially seeks the opposite of everything the Fire phone tried to achieve.

  • The Ice lineup will target emerging markets such as India, not elite markets like the US.
  • The reported specs of one of the devices are 2 GB of RAM, 16 GB of internal storage, 13-megapixel rear camera with a 5.2-5.5 inch screen. Powering the phone will be a Snapdragon 435, a fingerprint scanner on the back and Android Nougat. These specs place the phone in the budget-mid end segment in terms of smartphone specs and performance.
  • The phone will reportedly be priced at $93 (Rs 6000). This means Amazon is targeting the budget segment of emerging market.
  • Perhaps most importantly, the Ice line of phones will feature the entire suite of Google’s Apps including Gmail, the Play Store and Google Assistant.

This is a surprising move by Amazon. By essentially reversing everything that constituted the Fire phone, Amazon is looking to crack the smartphone industry in an entirely different fashion.

Amazon Adapting To Their Failures

After the relative success of the Amazon Fire tablets, Amazon geared up to enter the smartphone space with their much hyped “Fire Phone” in mid-2014. With “innovative” new features, top of the line hardware specs and a price-tag to match, Amazon went after the premium segment and competed with the big boys – Apple and Samsung. Needless to say, it didn’t work out for them. Nearly three years have passed since then, and now would be an opportune moment to conduct a post-mortem analysis of the Fire phone.

The reasons for the failure of the Fire phone were manifold, but they can be boiled down to a few critical ones:-

  • Gimmicky Features – The Fire phones tried to stick out from the pack by implementing some “innovative” new features like its 3D display. However, these features turned out to be no more than gimmicks and rarely provided any real functionality.
  • Pricing – The Fire phone was touted as a premium phone intended to compete with the best. This was not the best idea, as users preferred similarly priced offerings from Apple and Samsung.
  • Exclusivity – The Fire phone’s target market was the US and a couple of other western markets. However, its exclusivity to the AT&T network seriously dampened its sales prospects.
  • Custom OS – This was undoubtedly the biggest deficiency with the Fire phone. The FireOS lacked the highly popular Google Services like Gmail and Play Store. This was a deal breaker for many users who found Amazon’s competing services simply not good enough.

It is clear that Amazon has learned the lessons from this. The new Ice phones will be very competitively priced, have no crippling exclusivity agreements, and will feature a fully featured version of Android. However, will this be enough?

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Can Ice Succeed Where Fire Failed?

The Ice lineup is liable to be hugely important for Amazon. After the failure of the Fire phone, they do not have much room for further mistakes. This represents a vital opportunity for Amazon to expand its non-e-commerce branch of operations and grab a foothold in the $428.9 billion dollar smartphone industry. Amazon has shown tremendous growth in the past few years, as evidenced by their soaring brand value. However, to take on Apple and Google, they need to go to the next level and compete with them directly in the smartphone space.

The Ice smartphones can also help in propagating Amazon’s own service and app ecosystem. We have already talked about Amazon’s efforts to create an ecosystem capable of dominating technological platforms of the present and the future. If Amazon manages to invest enough users in their ecosystem, they may even be able to break free from Google and Android one day.

The Ice smartphones could also be good news for Alexa. We have already talked about how hugely important Alexa is for Amazon’s future. Although Alexa’s presence in the Ice smartphones is doubtful at the moment, they can still serve as a vast repository for data to aid in improving their AI via machine learning.

Takeaways

  • The average selling price of smartphones in India is about $155. In such price sensitive market, a $93 phone is sure to shake up the market. We can expect the Fire phone to provide stiff competition and gain significant market share in the low-end segment.
  • This is Amazon’s second attempt at the smartphone market. By going for high volume markets and focusing on services, Amazon is trying to expand their ecosystem and push their service business.
  • Amazon faces tough competition from Google themselves, who are also targeting developing markets with their Android Go platform. Due to their expertise and vast experience, the edge lies with Google in this face off.
  • The Ice smartphones pose no threat to Samsung or Apple. However, they do pose a threat to Chinese OEMs like Xiaomi, Vivo and OPPO which are currently dominating Indian smartphone market.

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