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Why Amazon Won't Repeat The Facebook Phone Debacle

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The biggest problem with last year’s Facebook-branded HTC First and Facebook Home platform — known as the “Facebook phone” — was simple enough: Nobody really wanted it to begin with. Simply put, even though many users allow Facebook to act as a gateway to their browsing, they don’t want Facebook to replace their internet or rule their homescreens. The fastest-rising social networks now are a legion of mobile messaging apps, each with their own specific use case. Even enthusiastic Facebookers made it clear they didn’t want a smartphone where the social platform is governed solely by Facebook. And Facebook, it appears, has learned from its mistake, and is now unbundling its apps by use-case.

But while Facebook’s digital ecosystem was centered around social engagement, Amazon’s will likely be centered around content and actual, physical products. As a retailing giant and a content delivery company, Amazon’s ecosystem isn’t trying to change its customers’ sacred social behaviors, but their purchasing ones.

And while that’s still a heady task, users are far less loyal about content and commerce than they are about their social networks. Take streaming services: People go where there is more, and better, content. And Amazon, with its huge retail arm, its Prime service, which now includes a streaming music and video, its Kindle and Fire TV archives with 240,000 apps and games, and Dash, a barcode-scanning wand that automatically restocks household items, the company has created a formidable ecosystem that’s been waiting for a phone to tie it and its 250 million customers together for years now.

Take this example, proposed by the New York Times’ David Streitfeld: 

For instance, say you bought a new camera on Amazon, searched for hotels in Florence, Italy, and downloaded a timetable for Italian trains; the company could ask you, Would you like to buy this passport holder? Special price, today only.

That said, Amazon faces a steep uphill battle. Google and Apple have both made significant strides strengthening their respective ecosystems and making life easier for those who choose to consolidate their electronics under one logo. It’s by no means impossible to switch, but with every iteration, Apple and Android are giving their customers more and more reasons to stay in the family.

And there’s the simple question of interest. A March 2013 Retrovo survey of 3,269 online consumers — the same survey that suggested that almost nobody genuinely desired a “Facebook phone” — showed little public interest in an Amazon phone. Amazon has ramped up its digital offerings quite substantially since then (Retrovo has also since been acquired and no longer runs these surveys), but it’s no doubt worth inquiring: Is anybody really asking for an Amazon phone?

No. But perhaps it will be very inexpensive. People want an inexpensive phone.

My *carrier* makes sure my phone is affordable.

$199 to make buying stuff from Amazon even easier.  AT&T is the exclusive carrier.

A move that really angered T-Mobile:

$199 for a phone is nothing special -- it's just like everyone else.

$99 would have been a breakthrough.

FREE would have been even better.

For some reason Amazon would rather charge $199 and throw in a free year of Amazon Prime.

I wonder who is going to buy this phone when we can have an iPhone or Samsung Galaxy instead for the same price.

There are Amazon zealots out there, but they are not legion globally.  T-mobile would have helped with the global situation.  

John Legere sums it up nicely:

"Fortunately for T-Mobile and the rest of AT&T's competitors, the exclusive deal with Amazon probably won't matter much. Yes, AT&T saw a lot of success for the three years it exclusively carried the iPhone, but things were much different then. Amazon is entering a highly saturated market, and there's little chance customers will want to abandon their carrier for an Amazon phone sold through AT&T."

It sounds like he's saying "Amazon is repeating the Facebook phone debacle."

It sure does. I don't know anyone planning on buying it.

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