Amazon Fire Phone Knocked As 'Shopping Machine', Not A Game Changer

Scott Grill

Amazon (NASDAQ:AMZN) founder Jeff Bezos unveiled the Fire Phone during an event in Seattle Wednesday that shot the company's stock up nearly three percent to close $334.38. The device was lauded for features like Dynamic Perspective and Firefly, but some analysts had harsher words for Amazon's first smartphone.

The main thrust of the Firefly feature is to make it easier for users to purchase goods online from Amazon. The Fire Phone will recognize around 100 million real-world consumer goods at launch from gadgets to toys to songs to DVDs to movies and TV shows. All of these can be purchased from the online retailer at the push of a button.

This led Dan Frommer at Quartz to deride the Amazon phone as a "shopping machine." Ian Fogg, mobile head of analysis firm IHS Technology, also picked up on the "shopping machine" theme in a note picked up by MCV UK.

"Amazon will find it easier to persuade existing Fire owners to test and use this feature than for it to drive Fire customer acquisition," Fogg said. "Because, why should a consumer buy a premium smartphone just in order to have an easier way to buy more other goods?"

Fogg also took a different tact by being critical of whether consumers will be willing to switch from their familiar Android or Apple smartphones on their preferred carriers to Amazon's Fire Phone available only on AT&T.

"Amazon's debut smartphone includes differentiated and technically impressive features, but none represent the game changer which Amazon needs to drive consumer adoption," Fogg explained.

The Fire Phone is limited to just AT&T in the United States, despite offering online retail services in major European and Asian markets as well. Fogg pointed out that AT&T ships around 8 million smartphones every quarter, "which is a tiny fraction of the global smartphone market."

The lack of access to the Google Play store for the Fire Phone's Android spin-off operating system is also a concern but one that hasn't limited the appeal of its Kindle Fire HD tablets. Smartphones are a different animal though and the introduction of the Dynamic Perspective feature may make developers jobs more difficult.

"The Fire [is] less appealing for the third party app developers which Amazon needs to tailor their apps for the Fire's differentiated features such as dynamic perspective," Fogg pointed out. "Amazon will either need to accept fewer apps supporting the features and so reduced differentiation for the Fire, or it will have to pay for developers to code for its smartphone, raising Amazon's costs and making it even harder to push its smartphone strategy into the black."

The appeal of the Amazon ecosystem, which includes Prime benefits like streaming movies and music plus free shipping, is hard to deny though. The limited launch of the Fire Phone appears to be the company testing the waters of the competitive smartphone market and the appeal of its hardware.

It took Amazon only a year to learn the lessons of the Kindle Fire and replace it with the improved Kindle Fire HD. Early Fire Phone adopters on AT&T will be able to say they got the phone first but the company will likely launch an improved phone on more carriers this time next year.

[Images via Amazon]