Amazon's original Kindle Fire went a long way toward popularizing the 7-inch tablet form factor—and perhaps small tablets in general. The reason was simple. At a time when companies like Samsung were selling 7-inch tablets for $600, Amazon captured a big chunk of the market with its $200 device. The Kindle Fire sold at or close to cost; the company instead profited from the promotion of Amazon services.
Kindle Fire devices weren't perfect. They ran Android but didn't have access to Google Play, which meant most of the best Android products (like Google Maps, Gmail, YouTube, and Google Now) were off limits to the Kindle Fire. Third-party apps were a problem, too. Fire devices ran outdated versions of Android and didn't have access to Google's APIs, namely Play Games, the Google Maps API, Google's Location APIs, and in-app purchasing. Many third-party apps simply didn't work on Amazon's platform. And with no Play Store, Fire users relied on developers putting in the effort to work around Google's APIs and upload their apps to a second, smaller store, the Amazon App Store. In the end, users often got one or two versions of the app, but updates didn't always follow. Finding the apps you want became an oft-cited problem among Fire owners.
None of this really mattered, though. Despite these frustrations, at one point (according to ComScore) Amazon was selling half of all Android tablets. Kindle Fire devices were comparatively dirt cheap, and when you save someone a few hundred dollars, it's easy to overlook a few shortcomings. Amazon discovered a winning formula of simpler but still well-made devices that aimed for a super-low price point. And the company was in the perfect position to try such a tactic, as profit margins could be thin because Amazon would make up any losses through its ecosystem.The Fire Phone was expected to follow this tradition—a cheap device that enabled users to pick up a smartphone for a great price. Like the Kindle Fire, a low price combined with Amazon's reach would be enough to open the smartphone market to new customers who otherwise wouldn't have considered it.
Initially, there appears to be a few problems with this strategy. The main issue being that Amazon's premium features don't seem strong enough to lure users away from elsewhere. Popular sentiment points to things like Apple leading the way with app selection, Google providing the most user control. Amazon's biggest two event bullet points—the Dynamic Perspective screen with its 3D-ish experience and the Firefly search capable of grabbing info from audio and visuals—don't strike us as being vital to the macro-level experience of using a smartphone. Worse, some of these capabilities are mimicked elsewhere (ever try Google Goggles?).
And while Amazon's phone is priced against the smartphone market's upper crust, it still has some of the same general shortcomings the Kindle Fire possessed. The combination of Amazon's own market, its Android-variant OS (Fire OS), and unique API for Dynamic Perspectives and Firefly mean Fire Phone users could face the same app fate as Amazon tablets. The experiences users want are there for now, but as the platform matures, devs must create and update versions specifically for Amazon Fire Phone. The company set itself up for a chicken-and-egg problem with things like 3D support. Developers won't support such extras if the install base is too low, and users won't buy into it because the feature isn't integrated in enough apps and areas.
Compare the Fire Phone hardware to the rest of the market and it seems like the Fire Phone followed the tablet's lead without the discount. At the high end, Amazon's new device is blown away by bigger, higher resolution screens, faster processors, newer versions of Android, and better app availability. For example, Motorola's Moto X offers a similar 4.7-inch, 720p phone for $350 unlocked or free on a two-year contract. On top of the hardware, Motorola's distinguisher is seemingly more useful—its cool voice controls.
Back when Amazon's devices were significantly cheaper than the competition, everything was fine (probably even beyond fine for the company). But charging a higher rate immediately gives would-be purchasers different expectations. And while we'll review the Amazon Fire Phone as thoroughly as we do any device (premium or otherwise), the initial information presented gives off the impression that Amazon is trying to employ a Kindle Fire-ish device strategy without its tablet pricing scheme. The company wants to have its cake, eat it too, and then send users to find more cake through Amazon services.
What happened to the disruptively cheap company that offered free mobile service to Kindle owners? The company that, thanks to scale and supply chain, pushed the cost of tablets and e-readers lower every year and even offered ad-supported hardware? The Fire Phone employs the same strategy as its competitors, except its hardware is in a tougher position, with an unproven 3D aspect, fewer apps, old software, and a much higher price tag. As recent history has shown, it's fine and even profitable to sell a device that is distinguished by essentially having an Amazon price check button on it—you just need to price it accordingly.
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