Amazon enters smartphone market with Fire Phone

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Kindle-makers first smartphone will leverage sales against its Amazon Prime subscription service

E-commerce giant Amazon has entered the smartphone market with the launch of its first device targeted at its existing customers.

Fire Phone has a 4.7 inch screen, 13 MP rear-facing camera, a 2.2 GHz quad-core processor, and 2GB of ram.

The phone also features 4 front-facing cameras which are used to create what it calls Dynamic Perspective. It will allow for 3D images to appear on the screen and allow other elements to be visible underneath other on-screen elements.

The cameras will track the users eyes meaning that they can control the handset by tilting the device which it claims will led to more intuitive controls – the cameras are infrared meaning that they will work in the dark.

The device is aimed at subscribers to Amazon’s Prime service – which allows for streaming films, TV shows and free two-day delivery on goods – and the company hopes to leverage this subscriber base, to drive initial sales. One year’s free subscription to this service also comes bundled with the handset.

Firefly, is a feature on the phone that will allow users to take a picture of around 100 million items and immediately be taken to fulfilment on the Amazon site. Pictures of points of interest and other items can also be snapped, to take the user to websites with information on the product.

No details on UK pricing and availability have been announced, although Carphone Warehouse did release a statement saying that if the intuitive features were executed well, the device “has the potential to lead the way for the next generation of smartphones”.

In the US, the 32GB model is available for $199 on a two-year contract or $649 SIM-free, while the 64GB model is available $299 on contract, or $749 SIM-free. Carrier AT&T has landed the exclusive deal to supply the handset.

The device has had a mixed receptions from analysts with Radio Free Mobile’s Dr. Richard Windsor writing that “its cost and limitations will put a smile on the faces of Apple, Google and Microsoft”.

“Amazon is continuing to make the mistake of releasing the smartphone before its ecosystem is ready to make it compelling,” he added. “This device is not going to pull users in as the device is the same price as the iPhone and then user has to pay another $99 to get access to the services. This will ensure that outside of the Amazon Prime ecosystem, there is no reason whatsoever to own this device.”

uSwitch’s Ernest Doku said that focusing on its specs was “completely missing the point”, claiming that it was Amazon’s leverage against the rest of its business that will make it a success.

“Amazon actually only needed a half-decent smartphone, offered at the right price, to compete in the short term. It’ll make its money from the books, films and music that users buy, so to go above and beyond to offer phone of this quality should really impress,” he added.

IDC research director for mobile devices Francisco Jeronimo said the device is not disruptive enough to disturb the high-end market, and labelled its decision to focus on hardware rather than content and services as “bizarre”.

“The device brings nothing disruptive or particularly innovative to end-users to justify such pricing. This will be a tough sell when compared to devices from the likes of Samsung, Apple or Sony. The only way Amazon has to succeed in the premium segment is by providing a disruptive shopping mobile experience, a disruptive price, or additional value to users. None of these were announced today, which is disappointing.

“Amazon is also missing a huge opportunity with carriers. What most carriers around the world are struggling with is to find new ways to increase revenues from content or services on smartphones. Sharing a small fraction of the revenues from each product bought with the Fire Phone would make every single carrier excited enough to subsidise the device and strongly promote it in their stores. This would ultimately result in a much bigger installed base of users for Amazon and higher sales on their website.

“Being a content and services provider and an online “shopping mall” it is bizarre that Amazon decided to launch their first smartphone focusing on hardware rather than on ways to contribute to increase their core businesses.”

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