A View from David Zax
The Latest on the Amazon Smartphone
It’s real, says Bloomberg.
No longer just a chimera, that Amazon smartphone I’ve mentioned here before now looks to be real, per Bloomberg’s predictably anonymous “two people with knowledge of the matter.” The phone would reportedly run on the Android operating system; it seems a pretty fair bet that it would look remarkably similar to the Kindle Fire, which runs a “forked” version of Android designed to funnel users into Amazonian content.
A number of commentators are skeptical of the value of an Amazon smartphone–Time’s Jared Newman, for instance, sees “many problems” with such a device. And it’s true if Amazon wants to offer, in effect, a premium smartphone (read: an iPhone-like device) at non-premium-smartphone prices, it will have its work cut out for it. It’ll need apps, apps, apps, most of all. It’ll need a great camera. It might even need a virtual assistant. But Amazon certainly seems up to the challenge; its recent acquisition of an innovative mapping service seems a first step down this road. But it’s a sound point that Amazon doesn’t have the same hardware chops as Apple; its legacy is in e-reading, first and foremost–content delivery. A fully fledged communications device, which is what a great smartphone is, is a whole different beast.
What should we expect next from Amazon? Patent plays. If it’s going to enter the tangled, litigation-frenzied world of the smartphone, it’ll need a strong patent portfolio to fend off the trolls (and the legitimate complaints). Bloomberg reports that Amazon already mulled buying a bunch of wireless patents from InterDigital, but the latter ultimately decided to sell them to Intel Corp. for $375 million. Amazon recently hired an IP/VC/PE guru named Matt Gordon.
If you were Amazon, which limping phone company would you swoop in to acquire? Whose patent portfolio would you stalk? Do I hear RIM? Do I hear Nokia? Onlookers like Jacob Steinberg of Seeking Alpha are debating the merits of each. Nokia has a large patent portfolio (some 30,000) and strong relations with over 100 carriers worldwide. Deliciously, if Amazon were to buy Nokia, it would collect licensing fees from Apple. RIM might come a tad cheaper, but it seems unlikely that Amazon would want to get involved with the BB10 operating system, when it’s already invested in forking a version of Android for its purposes.
More acquisitions seem likely in the near future; then we can really begin to extrapolate and Frankenstein together a vision of the smartphone Amazon has planned.