Thursday, 28 August 2014

Apps, App Stores and the Amazon Fire Phone

Amazon released the Fire Phone earlier this summer. It’s a premium smartphone with 3D-type projection capabilities and a number of poorly received features.

Amazon Fire Phone runs a forked version of Android; meaning none of Google’s apps are pre-loaded, and none of the apps are available in Google Play Store.

“Loads of Apps” is the “Killer App” for Consumers

  Source: Amazon, GP Store, iOS, WP

The graph above shows the different number of apps in each app store. Amazon trail miles behind Apple, Google Play and even a bit behind Microsoft (more on MS’ App Stores in a future post!).

The lack of apps in the Amazon App Store is a negative factor for their consumers. If we analyse the 1 star reviews of the Fire Phone on, you can see that the number 1 reason for a negative experience is the lack of apps available to the consumer.

Although Amazon tripled their number of apps in the App Store in a year – which is much greater growth than the iOS App Store ever had – they still have a long way to go to compete with GOOG or APPL.

So Why the Expensive Phone?

News came out this week that there are currently only ~35,000 Fire Phones in use, which is a pretty awful number. Most people are scoffing at Amazon’s mobile travails, the exact same media commentators who chuckled at Google’s Nexus’ lack of sales. What are Amazon up to?

Fire-Phone Stalking-Horse

I think Amazon have released a super-premium 3D SUPERPHONE for two main reasons: 1) get more info on their consumers and how they use phones; 2) get a flag-ship that encourages simple Android to Amazon ports of apps

1) More Info: Without hiring parts of the Android and iOS teams, Amazon are on the back-foot when it comes to understanding the mobile market, how customers use smartphones, and all the data points you get from being an OEM. Jeff Bezos says they’re in it for the long-term. It’s actually less risky to release a niche phone that won’t disappoint too many people, rather than go big and launch a cheap, for everyone phone that has no apps and no clue as to how their customers will use it. It was different with Kindle. Kindle was a brand new product that created a brand-new market (the iPhone of the ebook world); the smartphone world is 7 years’ old so that boldness can’t be risked. Amazon need greater intel on the market before they can start selling mass number of phones to the middle and lower end of the market.

2) Android app to Amazon app: Amazon has a very quick way to increase the number of apps too: it’s built on Android. So their developer guide to port Android to Amazon is pretty straightforward, and goes someway to explain why they have seen such rapid growth in a short period of time.

Amazon = Premium

Amazon’s natural fit is with people seeking a bargain, and always will be even if it’s only the perception of value. As I’ve argued, Amazon know they need a critical mass of ~1m apps in the app store. So, I think the most recent scoffing at their lack of traction and poorly received phone are misjudged. Not only are Amazon very quickly increasing the number of apps they have on their app store; they also have an in-built, quick-to-market, app creation tool which means developers can be tempted to port to a new app store and simply increase their coverage. It should also be noted that next year you can expect to see a few more lower-end phones announced once the app store size is closer to 750k.

Written by Hugh McCallion

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