In the wake of Amazon's (AMZN) announcement last week of its new Fire phone, there's a new smartphone platform in an already crowded field. Android and iPhone dominate the market, with Windows Phone and Blackberry scrambling for market share. Can the Fire Phone be a contender the next time you upgrade or replace your phone?
Possibly, and odds are good that Amazon will have an easier time than Microsoft (MSFT), which has struggled for years to become more competitive and yet today maintains a scant 5 percent of the smartphone market. Why? The Fire is simply a more appealing device from a company with oodles of goodwill among consumers -- something Microsoft is sorely lacking.
Some of the core specifications of the phone are relatively unimportant. No one is going to choose their next smartphone based on the processor (in Fire's case, a 2.2GHz quad-core processor that's roughly analogous to what you'll find in any of the current phones.
Screen size? This might be a minor consideration, but if you want a large display, Fire Phone's 5.5-inch screen is similar to what you'll find in phones from Samsung and Nokia; only Apple (AAPL) loses out on this calculus (for now -- we'll see what the company offers in the fall). Amazon's camera is a beefy 13 megapixel model, but Samsung's 16 megapixel camera is already poised to bleed customers away from Apple's 8 megapixel phone, if that's a critically important criteria.
But it's not. Those features don't sell smartphones -- consumers don't obsess over technical specifications in 2014 the way early adopters did in 1996. If you're like most people, you'll choose your next smartphone based on its app ecosystem, distinctive features and carrier. Let's consider these criteria.
The app ecosystem is Amazon's weakest link, but at least the company isn't starting from scratch. There are about 230,000 apps in the Amazon Appstore, and the company already boasts many of the daily apps you can't live without, like Facebook and Twitter.
But Google (GOOG) isn't porting its suite to the Amazon Appstore, so there's no Google Maps or Gmail app, to name a few. Compared to the million apps in both Google Play and Apple's App store, the Fire's app store experience is more akin to Microsoft's Windows Phone store (with 200,000 apps). That's not a good way to start the conversation.
Amazon has more to offer when it comes to features. No doubt, by now you know about the Fire's two signature moves, Dynamic Perspective and Firefly. Dynamic Perspective's visually arresting 3D interface might prove to be a gimmick, but even so it's likely to be the kind of gimmick that sells a lot of phones. It looks awesome, even if relatively few apps can take advantage of it (right now, about 40).
And then there's Firefly, sure to be the phone's most polarizing feature. The ability to point the phone at virtually any real-world object and instantly get more information about it and generally have the opportunity to purchase it on Amazon is a compelling feature, especially for anyone already deeply enmeshed in the Amazon ecosystem. If you have an Amazon Prime membership and make weekly purchases from Amazon already, this is for you. But it's easy to see the Fire as little more than a way for Amazon to boost its e-commerce sales. And if you take that cynical perspective, the Fire is absolutely, positively not for you.
And that leaves us with the question of carrier. Taking a page from the first iPhone launch, you can get the Fire on any carrier you like -- as long as it's AT&T. In an age when the iPhone and Android phones are available on pretty much any carrier, being locked into AT&T could be a non-starter for many folks.
The Fire has some exciting and innovative features. In many ways, it's the phone Apple fans were hoping the 5s would be last fall. But those innovative features walk a fine line between cool and gimmicky. Perhaps Amazon is banking on its general goodwill being the secret sauce that sways consumers to the Fire when it's available later this summer.