Amazon introduced its long-awaited 4G-enabled smartphone, the Fire Phone. Beyond its 3D visual gimmickry and snazzy features, the price, starting at $199 (about Rs. 12,000) for phones bundled with AT&T data services, would be a big draw for customers in the US. But look hard, and this is not about the device despite its cool appeal. Amazon’s core strategy would be to tie buyers in with bargain offers from its own online store that sells everything from e-books and songs to a whole load of retail goods. The Fire Phone comes with an Amazon Prime consumer service membership. Remember, Amazon is now operational in India and is looking for 100% FDI (foreign direct investment) in e-commerce.
The smartphone is such that when apps, promotions or ads appear on the screentop, it takes the appearance of a storefront. Earlier, I have used the term “contentabs” to describe tablets that have pre-bundled content. Now I think it is time to call phones that have back-end e-commerce as “dealphones”.
Now, in India, Mukesh Ambani announced at the annual general meeting of Reliance Industries Ltd (RIL) last week that high growth was ahead in Reliance Jio, its telecom arm, which will start 4G services next year, and also in Reliance Retail. What he did not emphasise was that the two may get inter-linked. Now, imagine a smartphone bundled with 4G services that offers e-commerce — just like Amazon.
Amazon and Reliance may well start a dealphone war. Who knows, Amazon may find a strategic partner in India to sell even groceries to match RIL. Regulators and competition watchers may find this whole game interesting. But that’s another story.