While it may be true that Amazon is attempting to become a profitable consumer electronics manufacturer with a new smartphone venture, make no mistake that what matters most to Amazon is its ability to leverage those devices to improve the customer experience by reducing friction, and creating more buying/selling opportunities.
Turns out it was an epic flop and now Amazon is sitting on $170 million in unsold phones. But if you think that is going to deter Amazon, you would be wrong.
Blair Hanley Frank at Geekwire writes
Jorrit Van der Meulen, the head of Amazon’s device division in Europe, told The Guardian in an interview that the company is “undeterred” by the Fire’s poor consumer reception, and is taking feedback from the device’s introduction under consideration for future forays into the same space. “We certainly read everything that’s written from customers to journalists and take note, so might the second step be slightly different than our first step, sure. I suspect that it will be,” he said.
With their goal of being the most customer centric company in the world, Amazon most certainly will release an improved Fire phone that will sell better. But keep in mind, Amazon’s eye is on a bigger prize than just selling more phones, they want to sell more of everything. Fire phone is likely only one piece of a comprehensive strategy that Amazon is hatching to create their own shopping ecosystem in the story of our daily lives.
So almost on cue, Amazon introduces the Echo.
Echo is a tube shaped cloud device that recognizes your voice, answers questions and basically acts like an always-on Siri on steroids. At a glance it looks like it has the potential to be a supremely useful device to have in the home.
Of course, we think the Echo is Trojan horse, and Greg Kumparak of TechCrunch agrees.
Amazon is in the business of selling you things — and that is why Echo exists.
For now, Echo’s shopping-centric functionality is limited to helping you add things to your shopping list.
Need some pickles? Cool. Just say “Alexa, add pickles to my shopping list.” (Note: Echo listens for the word “Alexa” by default. You can pick a different name, it seems.) It won’t order them for you yet. It’ll just add them to a list for you to look at later.
But if Echo sees any sort of success, just watch how fast that will change.
You’ll be able to say “Alexa, order me a copy of Kung Fu Panda 2,” and it’ll be done.
“Alexa, order me some dope-ass high thread count egyptian cotton sheets.” Bam. Done. Sheets are on the way.
One-click purchase becomes no-click purchase. Your entire house (or at least, anything within earshot of Alexa) becomes the impulse-buy candy shelf from the grocery store’s checkout lane.
While other online retailers scramble to optimize their shopping carts, Amazon continues to do that too. Amazon is also innovating methods to take their shopping cart offline and embed it seamlessly in our day-to-day lives.
So while Amazon weaves themselves into the fabric of their customers’ life stories, will other retailers be able to keep up?
Probably not without working just as hard as Amazon does to understand its customer.