Can't start a Fire without a spark: Why Amazon is dancing in the dark

Can't start a Fire without a spark: Why Amazon is dancing in the dark

Summary: How Jeff Bezos failed to disrupt smartphones, disorient carriers, or destroy the iPhone.

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On Wednesday of this week, with high expectations and great fanfare, Amazon launched its Fire Phone.

There's been a lot of coverage of the device from a technical innovation perspective and how it positions itself against competing offerings from the Android device manufacturers and Apple's iPhone. I'm not going to revisit that because I think that ground has been covered ad nauseam.

There's no question that the Fire Phone is a strong product offering, in the sense that it offers technological differentiation from its competitors while at the same time is at "spec parity" with most of the high-end Android devices on the market, such as Samsung's Galaxy S5.

However, what the Fire Phone and Amazon failed to do with this launch was to actually disrupt, which is what one would expect of a new player in the mobile space and Jeff Bezos's track record with new consumer electronics products as a whole.

Let me invoke my inner Springsteen: Jeff Bezos tried to "start a Fire without a spark."

Other writers and analysts have pointed out that perhaps having AT&T as the sole carrier at launch and not going with a more of an "uncarrier" or contract cutting voice/data model may also hurt adoption of the device. Maybe T-Mobile might have been a better choice in this regard.

But in terms of being able to fundamentally change the way people purchase wireless data today across carriers, I'm not entirely sure this is something even Amazon would have had sufficient leverage with.

I'm being realistic here that the wireless industry in the United States is such a wretched hive of scum and villainy that nobody is going to be able to fix it without significant government intervention. So on that front, I'm going to let Bezos off the hook.

The 3D dynamic perspective/stereopsis display tech is certainly interesting and it may create some compelling consumer applications (particularly games) in the future.

Had this been a "perk" (like its Mayday feature) and not a defining feature it would be one thing, but it's actually being positioned as the prime differentiator between competing Android devices and the iPhone.

It's hard to justify a product purchase on a feature that is not currently exploited by existing Android applications right now. And as ZDNet's editor-in-chief Larry Dignan notes, it's all up to the developers to determine whether or not the investment is worth it to add those features to their Android applications just for Amazon's devices. 

Its taken three years alone just for Amazon to populate its Appstore with the most popular Android apps, let alone ones that specifically would take advantage of Dynamic Perspective. And Amazon's store is far from comprehensive, as not every Android developer is on board.

"I also fail to understand how this product is fundamentally better than other smartphones on the market for the company's loyal Prime customers, for who this phone is essentially targeted to."

Firefly, the advanced product recognition technology, which is essentially the number two most hawked feature of the device, is also not necessarily a differentiator.

The tech could have been offered in the Google Play Store as its Amazon application is now, which currently has barcode recognition technology in it. And the SDK with associated libraries needed to extend existing Android apps with the Firefly APIs could have been packaged with it, although I'm not sure how that would impact the Google developer agreement.

A dedicated Firefly app could also have been ported to iOS, although Apple would have certainly wanted its 30 percent cut on in-app purchases had Amazon done so. Amazon does this with its existing iOS store app already.

In other words, if the objective was to drive as much commerce to Amazon as possible with smartphones using Firefly, they didn't need to launch a new device in order to do it, they already had hundreds of millions of existing smartphones in the wild to put it on.

Knowing Amazon, this is probably already in the cards in the future. So I wouldn't count on Firefly exclusivity with the Fire Phone.

But the Dynamic Perspective and Firefly being marketed as the prime differentiators are not the core issue here — the phone itself is coming out the gate at the same price point as premium Android devices and the iPhone, at $199 in the least expensive configuration. 

To me, this was the primary failure in the product's launch, to not disrupt on pricing.

Amazon was able to make a big impact with the initial Kindle Fire launch by providing more bang for the buck with its 7-inch Android tablet than their competitors' and setting the new price point for that form factor at $199. 

Instead, Amazon went with a bill of materials in the Fire Phone, which prohibited it from being sold at a lower price point. Yes, the four stereoptic sensors are nice, but they probably contributed $25-$30 to the bill of materials.

It's also probably worth mentioning that the 3D stuff is going to be much more compelling on a contract-free, Wi-Fi next-generation Kindle Fire 7-inch or 8.9-inch HDX, where the larger display is going to be far more exploitative of the stereopsis effect.

Additionally, not offering a 16GB version of the phone and leveraging more of Amazon S3 for application data storage and restricting it strictly to photos was also was a big mistake.

They really could have positioned the power of its cloud with this device, and in that, I also regard as a fail.

A non-3D, 16GB Fire Phone could have been a disruptor at $99 or less. This counts as a big missed opportunity in my opinion.

I also fail to understand how this product is fundamentally better than other smartphones on the market for the company's loyal Prime customers, for who this phone is essentially targeted to.

The phone could have been made cheaper for existing Primes, or perhaps some complimentary data perks or Appstore credit could have been added. The free year of Prime that comes with the device is nice, but I don't see how that is enough of a carrot for a device that one needs to live with for two years under a wireless contract.

The new Amazon Music perks for Prime apply to all Prime customers on all platforms, so the Fire Phone isn't offering anything better that Primes don't already have now on their Androids and iOS devices.

Maybe I'm missing something, but while the Amazon Fire Phone is a nice device, I don't view it as an industry disruptor like the Kindle Fire was. Do you agree? Talk Back and Let Me Know.

Topics: Amazon, Mobility, Smartphones, Innovation

About

Jason Perlow, Sr. Technology Editor at ZDNet, is a technologist with over two decades of experience integrating large heterogeneous multi-vendor computing environments in Fortune 500 companies. Jason is currently a Partner Technology Strategist with Microsoft Corp. His expressed views do not necessarily represent those of his employer.

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Talkback

118 comments
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  • Ditto

    I agree.
    Marzell
    • Carriers

      It could have been a spark if all carriers had access to it. I would have ordered one by now if it had my carrier.

      You are right "wireless industry in the United States is" "a wretched hive of scum and villainy". You are also right that Amazon does not have the leverage yet to be on all carriers. If it had then it could have been a spark.
      MichaelInMA
    • But...but...it lets you buy

      stuff from Amazon!
      baggins_z
  • Consumers don

    Nice try at a bad metaphor, but Bruce got the girl up on the stage after all.
    Vesicant
    • spark

      the boss -> dancing in dark -> spark -> girl on stage

      amazon -> dancing in dark -> waiting for spark? -> profit

      Seems like a good metaphor, generally no killer app or price here to disrupt the market.
      Amazon has an advantage in being able to sell it from their home page though,
      so even making an equivalent product to the iphone so samsung they have some advantage, along with more data feedback for improvements.
      cifey2
    • And on a more practical level .....

      you do not need a spark to start a fire. You need fuel, heat and oxygen. The spark MAY be the initial source of heat, but there are several other possible sources. ;-)
      Economister
    • Bruce got the girl up on the stage after all

      A young Courtney Cox...you know, before she had all the work done.
      Arsenal_Fan
  • And?

    Will it be the most disruptive force ever in phones? Probably not. Does that make it some sort of failure? No.

    It will sell millions, which will produce more shoppers who by default go through Amazon for their purchases.

    Though it would be nice of course, they don't give a damn about being number 1, and never expected to be. There are lots of successful businesses that aren't #1 in their field.
    vermonter
    • "Sell millions"

      I think that is a big assumption. Amazon sold millions of kindles and kindle fires, but smartphones are different than $200-$300 Wi-Fi tablets. Smartphones require mobile data contract commitments with ongoing monthly payments.
      jperlow
      • not really...

        Data/Voice contracts and high monthly payments? Nope, not here. Straight Talk, Ting, etc etc etc - even Verizon and AT&T are beginning to offer no-contract plans with the phones that are sold through them.
        william_koenig
        • Yes

          But this isn't a zero-contract phone.
          jperlow
          • But it IS an Amazon device.

            These days, Amazon seems to be trying to out evil Google. That may not be important to you, but it is to me. And a lot of other people.
            pishaw
          • Limited Market

            The Kindle Fire had a world market because you could purchase soft content (books, music, video) anywhere in the world. For the phone the content targeted is more physical dry goods. While Amazon can deliver to many countries, there are many more places where it cannot deliver. This will limit world wide sales and may keep it under a million or at least keep it less than the Kindle Fires. Again, I am taking a world view and not a US only view.
            MichaelInMA
          • Don't bet on it, Michael

            Books, music and video work quite well on phone platforms as well. And if Amazon synchronizes accounts the way Apple has, any book, music or video purchased for the Kindle Fire will be playable on the Fire phone. The Fire phone thus offers the ADDITION of one-click bar-code/QR scanning while shopping--completely bypassing apps that are strictly third-party for Android and iOS. By no means will the Fire phone be dry-goods centric.
            Vulpinemac
          • Too Small

            Music probably but for books and movies the screen is to small. Try spending 2 hours continuous reading a book on it or watch a full length movie. It may be possible but not practical.
            MichaelInMA
          • Still disagree, Michael

            Because I do it all the time on an iPhone 5. There are some places where it's just not practical to carry a tablet... of any size.
            Vulpinemac
          • ATT isn't a worldwide carrier

            Mike, the global picture is even simpler than that.

            Amazon is bargaining with carriers in the UK, and I'm sure they are working on Germany, Canada, etc. But in many companies the phone simply won't be available.
            Popnfresh100
          • It CAN be bought off-contract

            for $649 or $749 unlocked.
            paul613
          • It's not unlocked

            It's off-contract, but still locked to AT&T. And yes, to put words in your mouth, that sucks.
            High Tech Troglodyte
      • It is an assumption

        It is an assumption, but not unreasonable (once they get unlocked from AT&T, especially). I am thinking millions in the next couple of years, not in the first month or two.

        I never bought a Kindle Fire, but if I can get all of the freebie benefits (free books, etc), that until now were only available to Kindle owners, that would be very enticing.

        One major advantage they have, over Blackberry and the others - they aren't dependent on cell phone sales to keep their company afloat. They can ride out lower sales for a long time...
        vermonter