iPad: Kindle Fire, Nexus 7

Apple TV: Kindle Fire TV, Chromecast

iTunes: Amazon Prime Streaming TV + now music, Google Play

iPhone: Kindle Fire Phone, Nexus 4

I think they're all playing for the same territory. The big difference seems to be that Apple really only sells the technology. Google sells the technology so that they can sell advertising for third party products. Amazon has the only complete end to end solution where they sell you the products and advertise for their own "other stuff" they sell. IMHO Amazon is going to be the big winner in the long run. Whether or not that's good for all of us is yet to be determined.

If I'm interpreting that correctly, I don't see how that holds. People use smartphones/tablets/televisions to consume many things. Amazon products are just one of them.

I don't think that just because controlling the entire product ecosystem would work to Amazon's advantage means that customers will want a phone that enables that end-to-end control.

The end-to-end control works well for the Kindle, because eReaders are used really only for reading the books that are available only on Amazon's eReader marketplace. But I can shop Amazon from any device I want. So having a phone that owns that experience isn't a major value proposition for me. I'm much more interested in things like display, battery life, camera quality, sound quality, and the phone's popularity than which product ecosystem it taps into.

To me Amazon is working from a major disadvantage here. The technology doesn't seem mind-blowing, the device at first blush doesn't look remarkably different from what's already available, and since phones are largely subsidized by carriers, most customers aren't going to be hugely price-sensitive. If anything, people opt for the most expensive, newest phones. If Amazon is looking for the people who will spend the most money, they certainly won't be interested in customers who think $199 is too much to spend for a new phone that they will use every day for at least two years (which is a moot point since the phone is priced at $199).

Amazon sells you a device so they can show you an ad encouraging you to buy a rake. Amazon sells you the rake, has it delivered in 2 days, and makes 100% of the profit.

It's not that people will actively look for that integration, but that it exists gives Amazon a significant advantage imho.

Amazon sells you a rake made by a 3rd party who was put into FBA by a wholesaler and makes a reasonable cut of the profit in the process.

Amazon has more control but also takes all the blame when things go wrong.

Tbh, as someone who works at a business who does both the ads & selling stuff via Amazon as a manufacturer...Google actually makes more money off of us than Amazon does. I don't mean like a "little more money", I mean something like 5x as much money. This part is anecdotal obviously but I think you are very, very wrong in assuming that "Sell Product" > "Sell Ad".

Unless you only sell through Amazon, then a global comparison wouldn't be fair, because Google is semi-monopolist in ads while Amazon is far from it in retail. You should compare your average user acquisition cost with the wholesale margin left to Amazon; eg: how much does it cost to acquire through ads a user that buys products for $100? And how much of those $100 are left to Amazon?

When I say 5x, I mean Google gets 5x the amount of money than Amazon does. I think that is more relevant than a "per item" basis.

> Unless you only sell through Amazon, then a global comparison wouldn't be fair, because Google is semi-monopolist in ads while Amazon is far from it in retail.

It isn't my fault Amazon can't sell more of our products. ;)

> You should compare your average user acquisition cost with the wholesale margin left to Amazon; eg: how much does it cost to acquire through ads a user that buys products for $100? And how much of those $100 are left to Amazon?

That is a bad way of comparing for purposes of this conversation.

Amazon has to pay for shipping, pick & pack, customer service, return shipping, etc. That isn't free.

that would make it sound like amazon's current business model isnt working, which I think its doing pretty well. Amazon has razor thin margins for sure

Amazon's business model works. It just doesn't take "100% of the profits" by any stretch of the imagination.

Sorry if that was unclear.

Personally, I have a very much love/hate relationship with Amazon and I blame them, not the vendor.

I've had to issue a chargeback because of Amazon's incompetence...which most customer's probably haven't. It is literally the second chargeback I've ever had to do in my life, so it tends to stick with me more than it might for other people.

The eye tracking is nothing new and 3D as a sale gimmick crashed and burned years ago and I don't amazon doing anything revolutionary with it here.

If it were $200 unlocked then I can see it selling like crazy, but the current plan makes no sense, if amazon was providing the service as a MVNO and offered stuff like truly unlimited data and stuff then maybe, just maybe, but $199 for this phone and on AT&T? PASS....

That is clearly not the case with Amazon. "Just increases their profits" is pretty much the only thing that matters. Dominant market share comes much later, if at all. Dominant market share might even be a bad thing, if attaining it requires a race to the bottom. Most companies would (and should) prefer to sell a million devices with decent margins than 10 million devices with little or no profits. Amazon is known for pursuing market share at the expense of profits, but that's often not the best strategy and they can be excused for not taking it this time.

It's also better from a risk management perspective. For the first iteration of a device like this, it's less risky to try to sell a few of them at reasonable margins then to try to sell a gazillion of them at razor thin margins. The price of failure is far less, and depending on how this one does, then the next time around they can start adding cheaper models and gradually expand the user base. Or not, their choice. It's not always worth it.

If they can leverage that to reduce buying friction, then yes, that's exactly the right move!

At $199, my gut tells me that the early adopters of this phone will largely be people who already use Amazon regularly.

The term "big winner" to me implies that the thought process is that they will win out over Samsung and Apple in the long run, but I don't think that is very likely anytime soon. I don't hate the move by Amazon because you have to start somewhere, but predicting them the winner as this device is first launched is very optimistic in my eyes.

Amazon's dominance is always a 'future certainty', meanwhile Apple eats it's lunch.

i.e. "iTunes, Software and Services has been growing between 30% and 40% for four years and is on its way to $30 billion/yr in transactions and sales for 2014."

http://www.asymco.com/2014/05/09/measuring-not-getting-the-c...

   Apple: Sell at high price, modest tie-in revenue.
   Google: Sell at low price, modest tie-in revenue.
   Amazon: Sell at low price, high tie-in revenue.

Revenue =/= profits. Amazon is a middleman and are only successful at generating revenue growth because they don't make profits.

Plus most of their sales were B2B where brand loyalty means little for commodity products, esp. given the high tie-in strategy.

Apple: We sell an experience of software and hardware. Google: We sell ads, based on data we gather from our users. Amazon: We sell commodities\services as close as possible to the marginal utility, so we're very competitive.

Altough each of these tech giants are competing, each has quite a different strategy.

As for the Fire phone, I think that Amazon realized that they could deliver an excellent shopping experience from the mobile phone. This would enable massive future growth: Think about going home in the train and buying groceries instead of driving to your nearest Wallmart.

I think you are vastly under-estimating Apple's dominant position in the fastest-growing and most profitable category of "selling other stuff": digital content. Itunes is on track to $30 billion revenue this year with huge yearly growth several years in a row. That is almost half of all Amazon revenue combined! And presumably with vastly better margins, too.

In the next decades people will spend more and more on digital goods (Apple's turf), at the expense of physical goods (Amazon's turf). Amazon will do anything to avoid being leapfrogged that way. They have a very strong cloud infrastructure story, obviously, and are playing decent catch-up in many other areas, but in the grand scheme of things they are very far from the guaranteed winners.

Until Google or Amazon comes out with a truly gorgeous easy to use interface and a metal/glass phone I don't see them competing with Apple.

EDIT: Apparently the Fire Phone has a glass back, but it looks like plastic bevels. No thanks.

I see this a lot of HN, and I wonder if people are just assuming? To put it into context, I see far more ads on my iPad and iPad Touch than I ever have on my Nexus 5.

Outside of the money Google makes from their book, video, and apps stores, they sell the technology to ensure that their services remain viable, and cannot be cut out of the market. They make the platform so Google has less concern about being cut out of the ecosystem.

I mean we see the paradox on here constantly where people will gloat about how much more valuable iOS users are to advertisers, but then that Android is a platform for ads.

Aside from web content and occasional visits to the app store I don't think that I can ever recall seeing an advertisement on any of my iOS devices.

That said, it may be the case that web-based advertisements are targeted at and/or tailored for iOS/Mobile Safari.

If you mean website ads, then you can thank Google for that - I'm pretty sure that a significant majority of all web ads use Google's ad networks. Of course, thanks to Apple's double-tap for zoom, I usually bypass most of this visual cruft when browsing on my iPhone.

True, but let's not ignore that their core business is selling advertising. Before Android came along that business was at the mercy of Apple (in the mobile space anyway).

>I mean we see the paradox on here constantly where people will gloat about how much more valuable iOS users are to advertisers, but then that Android is a platform for ads.

Android isn't specifically a platform for ads, but it was indeed built so that Google wouldn't lose the ability to serve ads on mobile hardware.

The NFL is primarily sponsored through network agreements, which themselves are primarily sponsored through advertisers. Is the "core business" of the NFL, then, advertising?

Of course it isn't. Such an argument is specious to the point of uselessness, and only appears in the form of rhetoric. The NFL's core business is making an entertaining sports product that people like watching, and then they find ways to monetize from that.

Apple operates and promotes its own ad network, and its lack of success in that market doesn't somehow separate it from that reality. No one would claim that Apple's core business was iAds.

IBM's core business is monetization, by definition. Making services that enterprises like to use is what they do to feed that core business, not vice versa.

Walmart's core business is monetization, by definition. Selling goods that people like or need is what they do to feed that core business, not vice versa.

Toyota's core business is monetization, by definition. Selling cars that people like or need is what they do to feed that core business, not vice versa.

The local florist's core business is monetization, by definition. Selling flowers that people like is what they do to feed that core business, not vice versa.

Every for-profit's core business is monetization, by definition. Performing a large variety of things that make money is what they do to feed that core business, not vice versa.

Android has existed for the entire time mobile advertising was becoming huge. The iPhone was a big innovation, but in its first year it wasn't nearly the mass market device it is now, and its impact on mobile advertising at the time should not be overstated. Mobile and mobile advertising only started becoming really big in 2010.

I don't think Android was built with the specific goal to directly put Google's services into people's hands. I believe Android was built and released as free to be used by anyone to create an easy-to-use platform for any vendor with very capable connectivity features. It was hoped that this would increase use of Google's services on mobile, not because Google was forced into the market, but because people would have devices capable of web services in general.

Android seems to be made with a goal of making a market, not taking a market. That is why there is this diverse market for Android, and that's why all those associated problems exist. Its strategy also directly made possible this Fire Phone.

Agreed. I'm having trouble visualizing how it moves from being novelty to being ubiquitous. I purchased one of the original Kindles back when it was a novelty, but I understand why it became the dominant eInk device since it was a novelty item with little to no competition. For the Fire, it's a novelty with stiff competition from the beginning.

As someone who rarely shops on Amazon and doesn't want a Prime subscription, why would I chose this phone?

Maybe the answer is Amazon doesn't expect this product to take off fast. Maybe it's a much longer term play initially targeted just to those already comfortably engaged in its ecosystem.

Uhh, you probably shouldn't and wouldn't. The smartphone market is a huge place, maybe they are just not trying to sell you this one?

This also doesn't mean they can't do a budget phone later.

[1] http://bgr.com/2013/12/17/amazon-prime-spending-study-cirp/

I don't need a "budget" phone, I can afford something much higher-end; but I still like to get value for price and in the face of the Nexus 5, the Moto G, the Moto E or the Lumia 635 all of which cost half or even less than a quarter of the price of the the Amazon Fire phone, it just doesn't look like a good value to me.

YMMV if the 3D perspective thing is that appealing to you, or you want a cellphone with a relatively very good camera, but neither of these are particularly important to me.

The 2 serious uses for it I can see are:

* Scrolling through things by tilting the phone. Personally I think this seems like a useful feature.

* Playing certain mobile games.

For general use, I don't think it'd be that helpful or aesthetically appealing other than "oh that looks cool". I don't really see the purpose of it when looking at maps, or especially looking at your home screen... In fact I imagine many people may find it annoying in many of the phone views.

So it's useful for the single thing Amazon is most interested in encouraging.

It seems that the most expensive thing here would be the mayday service. And maybe it's the killer feature here?

One big reason why seniors buy the iphone is that there are classes in the apple store which help them learn to use the device and overcome their fear of tech.So mayday could work well for that segment.

Also, many tech people hate coming home after work and doing tech support for their family. They could have a strong influence on their family members phone purchase decision.

And i'm sure amazon has got data from their mayday on tablet to estimate the value of mayday.

It'd make sense to price the phone high at release, both to maximize revenues and establish the phone as expensive ('good' in consumer's minds), and then slowly mark the price down while your supply chain ramps up.

This is the pilot model, which enables Amazon to earn revenue fast and capture early adopter surplus. We'll soon see a cheaper model with the more lavish and underused features trimmed, and other features much improved thanks to real world testing of the first model.

Seems for each interested buyer, I see ten who are more like "meh". Perhaps a rigorous demo of the phone's features would highlight it's "must-have" features.

Is that some sort of recognized gesture on your phone, or is it a way to calibrate a sensor?

Typically, the figure 8 is used to calibrate the magnetometer, but I can't see how it would help GPS.

The Galaxy S5 is a $600 device. The HTC One is a $600 device. The LG G3 is a $600 device. The iPhone is a $600 device.

I'm not seeing the price differential.

However, the notion that this competes with either Android or the iPhone is utter nonsense, and we saw exactly the same noise with the Kindle Fire. People seem to have some need to try to assuage their corporate leanings that it's "someone else's problem".

Only it's a smartphone. People buy smartphones, not brands, even if they have brand associations. This device, just like every device, is in the mix for people who are considering a smartphone and who don't attach their ego to a company.

So you would say this competes with nothing though?

You claimed that it was targeted at the iPhone based upon price, when many of the top selling Android devices are the same price as the iPhone.

So you would say this competes with nothing though?

I disagreed with any binary analysis of what it competes with. It doesn't compete with "either", it competes with both. People buy smartphones to provide information and value, and any possible smartphone is a potential candidate.

People that aren't interested in the high end features of smart phones as they are now - people who might even choose a flip phone - but will spend money shopping for traditional items.

Some studies say iOS users (as a whole) are more willing to spend money through their phone than other demographics, but are they willing to spend on what Amazon is selling? This seems to refer mostly to musics, apps.

Cover the internet/messaging basics, offer quick & easy support, make traditional shopping easy - plus add price comparisons and you may tap a large non-tech segment.

If, however, I was an Android user, I would consider buying the Fire Phone as a replacement device, along with similar phones like the Samsung Galaxy.

You can sum up Google and Apple's market positioning in a tweet if you wanted. (Apple: premium phones, premium prices. Google: give away the software, monetize the search.) Amazon's positioning here is more vague, or perhaps nuanced.

There's also a degree of app quality that iOS still has over Android - I'm an Android user: 'Secret', for example, only just came out, and it's very unstable.

This is a mid-range smartphone at a premium price.

"Build quality" is such a meaningless term in common usage of smartphones, and speaks to personal subjective aesthetics, not some utility of purpose.

And this is all particularly interesting given that there's a good chance a significant part of the new iPhones will be made with plastic. But I'm sure it'll be a "better" plastic.

...so build quality is hard to quantify, and in most practical cases is subjective.

- Rubber breaks down faster than metal

- Rubber stains more than the metals you'd use in a phone

- Rubber can be torn, metal can't

So yes, objectively.

If you drop your phone a lot, rubber might help, but you'd need more than what the Fire phone provides.

No, it isn't objectively. You are subjectively choosing the criteria that makes one purportedly better than the other, yet they have zero applicability to the use or operation of a smartphone.

Grip matters very much with a smartphone. Rubber breaking down? Has anyone ever actually seen this happen? Is this actually a problem? Torn or stained? Again, is this actually a problem in the context of a smartphone? I would say no, it isn't at all.

A soft, comfortable, lightweight device that you don't have to immediately shroud in a protective case is, by actual use-based criteria, arguably the better "build quality". Build quality is suitability to purpose, not aesthetics or cult of material.

You have different criteria than robustness - understood, grip is important to you. Grip has its own objective measurements.

Christ.

If I was bitten by a snake, spider, etc. I'd love to be able to snap a picture to quickly identify it and know whether or not to rush to the ER.

Or else just use their "Subscribe and Save" system on this item.

So yes, do call 911, but taking a picture could be potentially life saving.

~~~

Spider: Have a painful bite on the house!

User: "Spider say cheese!"

User: "Amazon Phone is this spider poisonous"

Amazon Phone: Searching. This Spider does appear to be poisonous.

User: "Amazon Phone call Uber 911"

Amazon Phone: Calling Uber 911

Uber 911: Can you collect the spider to take to the ER?

User: "Yes, I'll do that"

  Black Widow: Have a painful bite on the house!
  User: "Ouch!"  *slap*

  [one hour later]

  User: "Oh my god, I am in unimaginable pain."
  * User is driven to the hospital.

  Brown Recluse: Have a painful bite on the house!
  User: "Ouch!"  *slap*

  [several hours later]

  User: This is starting to swell rather
        disturbingly, and smarts quite a bit.
  * User drives to their doctor

Many venoms have large delays, days even sometimes.

When I look at my low margin phone and service and almost non existent media consumption (nothing beyond shared cable or free streaming), I sort of doubt it.

With Mayday, I think there is another side to that risk: if they only get the market segment of customers who use Mayday a lot, that can get expensive, especially since they promise "Help in 15 seconds or less" (they do weasel out of that a bit by stating that is the goal, but if it comes to a court case, I doubt that will fully absolve them if average response time is, say, 30 seconds)

No, there's still place for a great, cheap phone that's aimed at the consumer market rather than the geeks or the developers who usually buy Nexus devices.

The sci-fi firefly stuff is cool and very tempting, but I don't have a strong use case for it and it's not going to drag me out of my current phone ecosystem at that price point.

I'm really surprised that they didn't feature this information in the price displays themselves for existing Prime members.

Imagine the point in time where anyone with a fire phone firefly's EVERYTHING they buy, before they buy it. Cheaper from Amazon, and free "2" day shipping? Killer feature. Never pay more again.

Fairly powerful for price conscious customers. Add in Spotify at $10 a month, Netflix at $10 a month ($240 a year, over $500 over the life of a 2 year contract), and you are getting the entire phone for FREE if you already have Prime.

At total value, if you wanted to have a "similar" phone with similar streaming services and content providing, you'd be paying more than if you bought this $200 phone, with a data plan you most likely will already have.

Looking at it that way, Amazon is paying you to use their phone. Understanding how the Prime model works, this makes a shit load of sense.

[1]: http://g-ecx.images-amazon.com/images/G/02/uk-careers/jfsfis...

http://www.beyond-black-friday.com/2014/06/12/amazon-announc...

If you wouldn't pay for Prime anyway, the phone isn't very competitively priced.

edit: plus, if they really have strong kindle/amazon streaming, they could be looking to try and take some of hulu/netflix's thunder.