It seems like Amazon is considering trying its luck with smartphones again, as the company's Senior Vice President of devices and services, Dave Limp told The Telegraph recently that a differentiating idea is what it would take the company to make another phone.
As Limp notes, smartphones are a big market segment, and the e-commerce giant apparently wants a slice of it. However, the industry is also insanely competitive and add to that the fact that it has been in a slowdown since the past few quarters, so breaking into the market wouldn't be that easy.
Thus, the company doesn't want to dive in before it comes up with ideas that will help it differentiate its offering from the other smartphones in the market. However, it's worth remembering that the company's Fire phone was an attempt at the same and two of the phone's unique features, 3D graphics, and the scanning function Firefly failed to resonate with consumers. On top of that, the Fire phone was incompatible with popularly used apps such as Google Maps.
In 2015, just a year after the phone's launch, it was discontinued and Amazon was left with an inventory worth $83 million. Limp initially attributed the failure of the phone to the introductory price, and although it was reduced later, the damage was already done. He also thought that it just wasn't differentiated enough for masses. The Fire did stand out, albeit for all the wrong reasons. On the bright side, Amazon's CEO Jeff Bezos thinks that although the Fire phone was a failure, the experience that came from its development helped with the creation of Echo and Alexa.
Although the retailer isn't said to be working on a smartphone right now, looking at a report from last year, the company might get it wrong again. When a smartphone, or any product for that matter, is developed, the manufacturer typically aims to satisfy a need. However, in Amazon's case, it seems like the e-tailer wants to get a phone out in the market so that more people will use Alexa.
Alexa is one of Amazon's most successful products and in July 2018, the company said that it wants customers to be able to use the voice assistant on the go. A smartphone with Alexa built-in will likely increase its adoption rate and help it reach its full potential. While there is nothing wrong with the idea, the strategy could backfire if the company's primary motive is to get more people to use Alexa.
Limp, who also heads the Echo and Alexa team at Amazon, further said that these products continue to grow and that Amazon is thinking about monetizing Alexa. However, the company is not so sure about putting advertisements on the product right now as it may rub the consumers the wrong way. So, for now, the company is still trying to learn more about user behavior and preferences so that it does not end up putting irrelevant advertisements. Right now, there are no plans to plaster advertisements on Alexa.