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Dumb Pipes and The O2 Amazon Fire Phone Exclusive

September 30, 2014 - Written By David Steele

O2, owned by Spanish parent Telefonica, have today quietly launched the Amazon Fire Phone in the UK. You can pick the 32 GB model on an O2 Refresh plan at £33 a month (approximately $54), which comes with 2 GB of data. Monthly subscriptions run to £48 ($78) if you want 20 GB of data. O2 Refresh is essentially an interest free way to pay for your device over two years and here, your monthly subscription includes £15 to repay the handset cost (£360 in total over the two years). I’ll come back to write a little bit more about O2 Refresh.

The news in early September 2014 that O2 UK had secured the Amazon Fire ‘phone as an multi-year exclusive deal was met with mixed feelings. Do carriers and manufacturers really need to secure exclusive deals these days? Our very own Tom is unhappy with the concept of network exclusives and the Amazon Fire ‘phone does not have the best reputation following indifferent reviews from the US, although as Android Headline’s Managing Editor Alexander Maxham discovered, the Amazon Fire Phone is a decent first effort. It has some gimmicks (Dynamic View) but some great software features, such as Firefly. It’s also important to remind readers that the Fire Phone we’ve played with is a first generation device. Smartphones are usually not like films: sequels are better than the original.

The other notable exclusive in recent years is the Apple iPhone, but let’s make something perfectly clear: the Amazon Fire Phone is not going to have the the same kind of success as with the iPhone. Not only is the device different but the world is, too. I believe it’s important to explain that O2 do not expect the first Fire Phone to be a runaway success. It’s quite the opposite; it seems that the business are expecting the Fire Phone not to sell well. Instead, they’re investing in the opportunities to bring the Amazon Fire product range to the UK market. It fits how O2 are positioning themselves in the UK market: they are changing their focus from being a sales organisation into becoming much more focused on the customer experience. In late spring 2013, O2’s General Manager (Stores) said, “We are using one store in different ways to introduce people to different technologies. Traditional mobile stores don’t do that. It’s about talking much more about what you can do with these devices and their connections. It is important our customers know what they can do with this wonderful technology. We want to become the most trusted provider of these digital experiences.”

This is how the Amazon Fire range fits into O2’s portfolio. It means that they have the exclusive for the ‘phone and perhaps the tablet or anything else that has the Fire logo on it and is associated with digital content. Who knows what we’ll see from Amazon in the coming years? But when I broke the story that O2 were going to be releasing the Nexus 8, the pipeline showed another tablet. I think I’ve figured that one out: it’s going to be an Amazon Fire tablet. And this is exciting because the Amazon Kindle Fire brand is known in the UK; dropping the word “Kindle” likely won’t change the brand recognition.

One is clear, though: when Steve Jobs talked about carriers becoming dumb pipes, the Spanish were listening. O2 are doing the equivalent of selling the picks rather than digging for gold. You can already use O2 Refresh to buy tablet when bundled with smartphones and I expect this will be extended to whatever else O2 are bringing to the market – they’re getting the Moto 360, Pebble and Pebble Steel smartwatches in October. I expect the Apple Watch to be picked up by the carrier too. And finally, as regards O2’s mobile network too: O2 secured the coverage obligation 800 MHz spectrum in the 2013 UK LTE auction, which means they are obliged to provide 98% of UK population with at least a 2 Mbps download speed by the end of 2017, which has kickstarted a massive full scale network upgrade across their 2G, 3G and 4G services. Sure; O2 needs to reinvigorate the sluggish data network but from personal experience, the new generation network is at least as quick as the competition and the change from old to new is like going from night to day. I was contemplating switching from O2 but I’ll be sticking with the carrier for the time being.