This week, Amazon released its first-ever smartphone, the Fire.
It’s a unique device, with functionality that Amazon describes as “dynamic perspective” that allows the phone to respond to the way you hold, view, and move it. You can switch between menus, initiate automatic scroll, and see images on the screen from different angles simply by tilting the phone or your head. The phone also comes with a “Firefly” feature that acts as Amazon’s visual search engine for the real world. You can identify (and get detailed information about) products, art, contact information, video, or audio simply by pointing your phone’s camera and pressing a button. The Amazon team started working on Fire four years ago.
The phone starts at $US199 on a two-year contract with AT&T or at $US649 off-contract, which isn’t the kind of dirt-cheap pricing strategy that people were expecting from Amazon. That price point is even more expensive than the average iPhone.
Why is Amazon launching a smartphone now when the market is already so crowded and well-established? Of the more than 120 million devices sold in the U.S. in 2013, Apple and Samsung took 45% and 26% of the market-share respectively, with other makers struggling to gain marketshare.
Ian Freed, Vice President of Amazon’s Fire Phone division, laughed when Business Insider asked whether he thought the Amazon phone’s innovative features were enough to drag hardcore iPhone or Samsung Galaxy fans away from their favourite devices.
Amazon’s not trying to completely take over the market (at least not yet), though it’s confident that certain people will be extremely excited about the new phone.
“With a tremendous number of customers who absolutely love Amazon, I think some will come over because of the ecosystem,” he says. “The reason that there were rumours and so much noise about this launch was, in part, because customers are really excited about it.”
Amazon currently has 244 million active customer accounts, with “at least 20 million” of those people paying $US99 a year for its Prime membership service. Another bonus of the Fire phone is that Amazon is throwing in a free year of Prime, even for users who already subscribe.
“You might have been thinking about Prime, you’re not really sure, while you’re also thinking about a new phone,” Freed says. “That combination is a great reason to come over to the Fire.”
By giving its phone such a unique user experience, Amazon is making a long-term bet that people will fall more in love with its features as third-party app developers start taking advantage of all its functionalities. The company released the development kits for Firefly and dynamic perspective at the same time as its launch event, and Freed says that he expects that the company will be surprised and amazed at what talented engineers all over the world come up with.
Overall, Freed says that combining the main “wow”-features with the little touches (like unlimited free cloud storage for photos) is what makes the phone such a great value for users.
“We saw a large, under-served opportunity to innovate,” he says. “We wanted to provide something to customers that wasn’t available to them from any other company.”
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.