What Amazon Brings to the Smartphone Market

While clearly a novice at making phones, Amazon brings a lot of know-how and relevant skills, which have already benefitted the company in the tablet space — Amazon has its own app store, Kindle book operation and digital music and movie services.

Those content businesses are important for two key reasons. First of all, consumers like being able to easily get their content onto their mobile devices, and to take advantage of content they already have access to. Secondly, Amazon has the ability to make money on those services after the phones are sold, giving the company a potential recurring revenue stream that few other hardware makers can match. While Apple has clearly been successful in this area, most other phone makers either don’t try or haven’t made inroads in selling content to consumers. That means Kindle could potentially have a profitable business even while undercutting rivals on the hardware side. Indeed, a survey earlier this year found that consumers were more interested in a phone from Amazon than they were in one from Facebook. (July 6)