In the past week, there have been some interesting updates about the rumored Amazon smartphone and Facebook smartphone products. The latest rumors suggest that both phones could hit the market before the end of 2012.
According to a report from All Things D (via Citigroup’s research department), the Amazon smartphone will be developed with FIH and manufactured by TMS (the same company that manufactures the Amazon Kindle e-reader and Amazon Fire tablet). The Amazon smartphone is likely to cost between $150-$170 to manufacture, which would bring the expected retail cost to approximately $300.
However, Amazon’s strategy is likely not to try to make money from the smartphone device but from the books, movies, games, and so on that users will purchase with the device. That’s not a new strategy for Amazon. The Kindle Fire sells for $199, which has been estimated to be $10 less than the $210 cost to build it. This type of loss leader strategy is a good idea for Amazon, which needs to find a way to lure consumers away from the established smartphone market leaders — Apple and Google.
All Things D also reports that a Facebook smartphone will be developed by HTC and a device could debut in as few as 12 months. The Facebook phone is predicted to be an Android-powered device with deep integration of Facebook’s social features. Neither Facebook nor HTC have commented on the rumor, but a Facebook spokesperson did offer the following quote to All Things D, “Our mobile strategy is simple. We think every mobile device is better if it is deeply social.”
Do Amazon and Facebook stand a chance in the smartphone market? Can either steal market share from Apple or Google? The iPhone is the most popular smartphone, but Android is by far the most popular platform (Android is available on multiple devices vs. Apple’s which is only available on the iPhone). Blackberry certainly learned the lesson that the smartphone market could change at any moment. Amazon and Facebook need to bring something extra to the table. They need to define a specific niche and offer a benefit that matters to consumers. Whether Amazon has chosen its pricing as its differentiator or not is still unknown, but one thing is for sure — copycat devices aren’t enough to be truly competitive at this point.
What do you think of the Amazon smartphone and Facebook smartphone rumors? What would Amazon or Facebook need to offer to convince you to switch to either brand’s device? Leave a comment and share your thoughts.