Amazon could build smartphones, MP3 players to compete with Apple

Posted:
in General Discussion edited January 2014
In addition to building the Kindle e-reader, Amazon's internal hardware labs have also explored the possibility of creating other portable devices, such as a media player or smartphone.



The options remain on the table, sources told The New York Times, as Amazon is interested in making devices that would make it easy for customers to purchase content from the online retailer. It's an approach that has resulted in great success for Apple, which sells content from the iTunes Music Store and App Store for its own portable devices.



But there's one key difference: While Amazon is at its core a content provider, Apple has repeatedly stated that it does not make a great deal of money from selling content. The Cupertino, Calif., company has long maintained that the App Store and iTunes Music Store are not meant to be major profit generators, but instead aim to attract customers to the iPhone and iPod ecosystems.



Known as "Lab 126," Amazon's hardware division is responsible for the Kindle e-ink-based reader. But recently, Lab 126 has also been looking into other devices it could potentially create and sell.



One person said Amazon Chief Executive Jeff Bezos originally created Lab 126 with the intention of creating other devices, including "music players and other electronics." Even a smartphone is on the table, author Nick Bilton wrote, though it was said that the project seems "out of Amazon's reach" at the moment. The online retailer reportedly has not ruled out the prospect of competing with Apple's iPhone or Google Android handsets.



"Internally, Amazon executives have been frustrated with other companies aggressively entering the digital content business, and one person with direct knowledge of the company's plans said executives there were prepared to do whatever it takes to ensure Amazon remained a major player in the sale of digital content,"



Amazon is currently looking to expand Lab 126, and is looking to hire a number of new employees. The team recently released a redesigned Kindle with an improved 6-inch e-ink display and a starting price of $139.







Earlier this year, Apple entered the e-book market and began to compete with Amazon in the digital reader space when it released the iPad and its accompanying iBookstore. The iBooks application was later released for devices running iOS 4 as well, including newer generations of the iPhone and iPod touch.



Amazon has also hedged its bets and also offers e-book reading software for other platforms, including Apple's iPad. Using Amazon's "Whispersync" technology, users can begin a book on one device, like a Kindle, and then pick up right where they left off on another device, like the iPad.



Amazon introduced its own MP3 store in 2007, bringing DRM-free music at a time when it was not offered by Apple's iTunes. Earlier this year, it was alleged that Apple attempted to pressure music labels into abandoning the "MP3 Daily Deal" promotion from Amazon, which features timed exclusives for popular tracks.
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Comments

  • Reply 1 of 49
    jazzgurujazzguru Posts: 6,435member
    Excellent! When there is more competition, the consumer wins. It'll be interesting to see if Amazon actually produces other desirable gadgets.
  • Reply 2 of 49
    Good luck with that. Just because Apple makes 'success' look easy, everyone thinks they can do the same!
  • Reply 3 of 49
    daveswdavesw Posts: 406member
    Amazon doesn't have the money, resource and talent to go in the hardware business.



    Not only are they going to lose, they're going to go out of business.
  • Reply 4 of 49
    Quote:
    Originally Posted by davesw View Post


    Amazon doesn't have the money, resource and talent to go in the hardware business.



    Not only are they going to lose, they're going to go out of business.



    Amazon is going out of business? Your reality must be an interesting place to live.
  • Reply 5 of 49
    Quote:
    Originally Posted by jazzguru View Post


    Excellent! When there is more competition, the consumer wins.



    True, however the world does not need another smartphone operating system.



    Today there are already six major ones: iOS, BlackBerry, Android, Windows, webOS, and Symbian. Realistically, the smartphone ecosystem can support three or four in regard to manufacturing, marketing, technical support, third-party application development and end user experience. My guess is in the next five years, one of these operating systems will evaporate and one will be virtually stagnant.
  • Reply 6 of 49
    solipsismsolipsism Posts: 25,726member
    Just imagine how long an e-ink cellphone would hold its charge for.
  • Reply 7 of 49
    Quote:
    Originally Posted by AppleInsider View Post


    Amazon introduced its own MP3 store in 2007, bringing DRM-free music at a time when it was not offered by Apple's iTunes.



    Still waiting for this is expand beyond the US. Apple took a year, I think, to open the iTunes store beyond America; Amazon's had 3, with no progress in sight. This applies to Android too: it's a global marketplace, and provincialism is going to hurt.
  • Reply 8 of 49
    the difference is Apple uses content as a means to sell hardware, while Amazon is trying to use devices as a means to sell content. The better margins and profits are in Apple' approach.
  • Reply 9 of 49
    eightzeroeightzero Posts: 2,036member
    Cool! I could buy a smartphone or MP3 player that compete with Apple...but why would I? Buy an apple device, and it works. It all just works beautifully for what I need.



    That said, my wife's Nook is a really great one-trick pony. The electronic ink is gogeous, and Apple doesn't make one. the iPad is cool, but you can't read it in direct sunlight. But think about it - the eBook readers are tied directly to the stores, and with the push of a button a sale is made. I just don't beleive Apple's claim the content isn't lucrative. At $10 for an eBook, how much of that is pure profit? Sure, maybe Apple isn't keeping it, but that's a license issue.



    eBook readers will soon be free. Maybe "buy 10 eBooks and get a reader gratis" or something. BN is trying to add stuff to the Nook like browsers and games, but that's a huge waste. Make it display a book lightening fast, tie it directly to as many eBook streams as you can (even the library) and you'll rule the world.
  • Reply 10 of 49
    If Amazon is interested in just content distribution then they can copy Apple and others and create an MP3 player. They can just do what Apple, Dell, HP, and other companies do, buy out a tech company that can design an MP3 player. Apple just designs things. They don't make things.



    I doubt that Amazon would enter the phone market unless they bought a telephone company. People don't buy phones for content usage. They are phones that have content usage as a feature. Why buy a phone company and all the crap that goes with it just to deliver more ebooks and MP3s?



    Amazon doesn't seem like a tech company to me even with lab 126. The Kindle was a surprise to me when it came out. It made sense though. Did anybody think of Apple as a company that would put out a music player before they did it? Sure they didn't make a portable CD player, they made something different. Still it was not expected. Maybe Amazon can do something like that and succeed.
  • Reply 11 of 49
    anonymouseanonymouse Posts: 6,558member
    Quote:
    Originally Posted by jazzguru View Post


    ... When there is more competition, the consumer wins. ...



    While this is the common wisdom, it isn't necessarily true. Business competition, in and of itself, is, like the competition of natural selection, essentially goalless.
  • Reply 12 of 49
    ... great, we need all the also-rans that we can get.



    Who else wants to play? The Barnes and Noble smartphone ...?



    Then, next year ... Starbucks Phoniccino!
  • Reply 13 of 49
    lkrupplkrupp Posts: 6,168member
    It's just like being at an orchard. Apple plants the trees, cultivates the fruit, and drives the tractor while others jump on the hay wagon and pick the low lying apples and peaches.
  • Reply 14 of 49
    bagmanbagman Posts: 349member
    Yeah, good luck with that. Better bet is to outsource to HP, and brand their Palm OS "device" a Kindlephone, which would have to use little ink cartridges in order to make the screen work (that's the only way HP can make money these days). I love my E-ink Kindlephone (sounds like something you'd buy your toddler for Christmas).
  • Reply 15 of 49
    jetlawjetlaw Posts: 156member
    It would make a lot more sense for Apple to start selling books!
  • Reply 16 of 49
    bring. it. on.
  • Reply 17 of 49
    charlitunacharlituna Posts: 7,178member
    Quote:
    Originally Posted by christopher126 View Post


    Good luck with that. Just because Apple makes 'success' look easy, everyone thinks they can do the same!



    Exactly. And given that Amazon has zero experience with phones, I see a failure waiting to happen.



    The Kindle kind of works and it is due to the fact that some folks just want a reader. not the rest. Not that many probably but enough to make it worth continuing.



    Just like with the whole "we'll have our ipad killer out later this year" games, an Amazon phone would likely fail due to be way too late into the game. I can't see them producing something that would wow folks so much that it would bring them off their iphones and Android.



    They might be better off trying to get their Kindle software onto devices natively, to put sales of their ebooks. Maybe create an mp3 and/or video software as well. Things that would link right to their online stores.
  • Reply 18 of 49
    aizmovaizmov Posts: 987member
    It'll either run Android or Meego, can't see them developing their own OS, and they'll prolly do a better job than Microsoft.
  • Reply 19 of 49
    quinneyquinney Posts: 2,508member
    Quote:
    Originally Posted by AppleInsider View Post


    Amazon is currently looking to expand Lab 126, and is looking to hire a number of new employees.



    Papermaster is available.
  • Reply 20 of 49
    postulantpostulant Posts: 1,270member
    I wouldn't count Amazon out. People said Apple couldn't do it either - boy were they wrong. Besides, look at the smartphone landscape, how hard is it to build an iphone clone? lol, not hard at all. Just ask " insert manufacturer of your choice "
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