Econintersect: Amazon.com (NASDAQ:AMZN) may fire a shot in the smartphone wars that will no be a warning, but a killing shot. A former Wall Street Journal editor, Jessica E. Lessin, who has broken many top media and technology stories, has an exclusive on her own website Friday 06 September 2013. Lessin says that Amazon will make a move that could cripple all other smartphone providers: The company will give away it’s new smartphones. Others sell competitive products for hundreds of dollars.
It is not clear according to Lessin if Amazon will bundle the offer with other paid sales, such as a wireless subscription plan or other paid services like the Amazon Prime program. Amazon might follow a strategy such as Chinese smartphone manufacturer Xiaomi who plans to make money off software (apps and games) rather than the hardware.
The phone could be a loss leader for software products.
Samsung (OTC:SSNLF) and Apple (NASDAQ:AAPL) would likely be the biggest losers if Amazon implements this strategy. Apple, which derives 51% of its revenue from iPhone sales, is especially vulnerable.
Struggling Blackberry (NASDAQ:BBRY) might not survive such competition. Microsoft (NASDAQ:MSFT) could also suffer a setback because of its puchace of Nokia (NYSE:NOK). Google (NASDAQ:GOOG) also has exposure because Amazon will use an Android-like system (Lessin says a “forked” version of Android) which will not include a pre-load of Google apps.
Lessin says the departure from a Google-approved Android platform has caused delays in the Amazon program due to difficulty in finding manufacturers who have not signed exclusivity agreements with Google.
Lessin says a possible launch date is “unclear”.
Hat tip to Russell Huntley who provided the lead to the Lessin article.
Source:
- Jessica Lessin (06 September 2013)
