Why Amazon Needs Its Own Phone

The global popularity of mobile computing has led to an explosion in mobile e-commerce. The amount of money spent using applications on phones and tablets grew by 117 percent between 2012 and 2013.

So it makes sense that Amazon, the leader in online commerce, would want to enter the smartphone market: if the company has more control over the mobile user experience, it will be in a better position to funnel consumers to its own online stores. Much like the original Kindle e-reader and the Kindle Fire tablet, an Amazon phone would give users a direct line to Amazon content—in this case retail goods—and give Amazon the opportunity to minimize the friction in retail transactions.

The shift to mobile buying is happening quickly. Last year, mobile e-commerce represented nearly 21 percent of all e-commerce. By the end of next year, more than a third of all e-commerce could be occurring via mobile devices.