Amazon is rumored to soon announce the launch of an Amazon Phone, a device that could be the same kind of game-changer that the Kindle Fire was to tablet devices. The phone will run on a stripped down version of the Android framework, similar to the Kindle, and is expected to be available at a lower price than the standard Apple and Android devices currently in the marketplace.
The phone will be a loss leader for Amazon, but fits well within the long term goals of the e-commerce giant. Amazon’s primary goal is to build out and develop the arena of mobile commerce, specifically by enabling mobile transactions through the Amazon system. Because of this they’re able to absorb the upfront device costs into the lifetime value of a typical Amazon customer. This focus on mobile commerce can be seen by the details revealed regarding the software pre-loaded onto the devices; the Amazon Appstore, Amazon MP3 Store, Amazon Instant Video, and other apps that tie directly into the Amazon ecosystem.
One other detail revealed is the planned disabling of the Google Play store in the Amazon Phone, similar to the Kindle Fire setup. This allows Amazon to control the content that’s loaded up on the devices, and ultimately allows them to keep the focus on Amazon items and services that revolve around the consumption of video, music and books. This could mean that Amazon will only allow a select number of apps to run within its apps, which could lead to frustration for mobile consumers and developers alike. But it could also open new features to developers if Amazon is able to push the envelope with mobile commerce through these devices, such as allowing for the Amazon Phone to be used as a credit card that is tied back to a customer’s Amazon account. Amazon recently rolled out in-app purchases through its Appstore apps, so this could be the next logical step for Amazon in the realm of mobile commerce.