Amazon is one week and two days (as of this writing) away from making a really big announcement. Nobody knows exactly what the details are, and the web is buzzing with speculation as to what Amazon has up its sleeves. But ultimately, what’s coming down the pipe is a mystery to everyone. It’s been about year or so since we heard Jeff Bezos (Amazon CEO) preaching his message about the importance of being an inventor, moving fast with new product ideas and concepts, and not being afraid to disrupt existing markets.
If you’ve been to the Amazon homepage in the last couple of days, you may have noticed a pretty steady stream of Amazon Prime promotions. This is the monthly service ($79 per month) that Amazon offers where you get a buffet of services like free 2-day shipping on millions of products, unlimited streaming of video, movies, tv shoes, and of course unlimited access to Amazon’s retail products. Amazon Prime is really a tool that allows customers to gain uninhibited access to content, books, and products of all types – basically, uninhibited revenue streams for Amazon.
Because Amazon’s profits are based on the sales of content and products, and not in the selling of hardware (actually, Amazon takes a loss on each Kindle Fire sold), then I believe Amazon has a few ways, right now, that it can completely disrupt the mobile industry. And not only disrupt, but become the dominant player in the mobile space, even uprooting the all-mighty Apple from it’s mobile throne.
Here’s 3 ways Amazon can disrupt the mobile industry
#1: The Amazon Smartphone
Not the most popular belief, I know. But an Amazon smartphone would be just another tool to give customers access to the near unlimited archives of content, music, movies, books, and products on Amazon.com. Not everyone likes to carry around tablets – even if it is just a 7 inch Kindle Fire, not to mention if it’s a 10 inch iPad. A lot of people, like myself, prefer to just carry around my iPhone. Regardless of how you and I feel about it, mobile phones are a large, integrated part of our lives.
The next time you are downtown in your city, take a look around and see how many people are staring at their smartphone. And because devices are such a huge, integral part of so many people’s lives (both young and old), then it would only make sense for Amazon to produce it’s own smartphone – again, giving you yet another tool to remain connected to the Amazon store. An Amazon mobile phone or app would allow customers to quickly access their Amazon Prime accounts and stream, access content, or shop quickly and efficiently.
#2: Free Unlimited 3G Data / Free Mobile Internet
This is a bit unconventional I know, and could (actually… it would) get really expensive. But let me ask you this – isn’t Jeff Bezos the kind of leader who wants nothing more than to disrupt entire markets and industries? I’ve been studying Jeff Bezos for years, and he’s not happy with the status quo – ever! He is always looking for ways to push the limits of innovation and technology.
And then you have the reality of Amazon’s business model – how they actually make money – and that is through the consumption of content. Mobile phones, tablets, and other devices like the Kindle, are growing at a rate that far exceeds computers and laptops. And in order for content to be consumed on mobile devices, with the exception of the presence of WiFi, people need data access on 3G or 4G networks.
This makes data networks (again, other than WiFi) critical to Amazon’s business model which is selling content via mobile devices. So with data connectivity have a direct correlation to Amazon’s profits, it only makes sense that Amazon would offer some form of free 3G data. Perhaps only a limited amount of data could be free, and then charge a fee beyond the “free” threshold, etc… Regardless of what the model looks like, it does only make sense that Amazon would offer free WiFi 3G.
#3: Mobile Payments & Mobile Recommendation Engine
One of the most effective tools in Amazon’s arsenal is their recommendation engine. This is the section that says “those who are viewed / or bought this product have also viewed / or bought these products.” And especially after you’ve checked out on Amazon, you will then get an entire page of recommendations based on what other people have purchased after buying the item you just bought. It’s a powerful tool because it generates additional sales that otherwise wouldn’t have happened. It actually reminds of the Wal Mart mindset with milk – it’s not by accident that Wal Mart puts their milk all the way in the back of the Super Center. Milk is probably one of the highest turn-over products in Wal Mart, meaning more people come back into the store to buy milk than any other product. So as you work your way to the very back of the Super Center to grab your gallon of milk, you are forced to walk by and look at nearly a thousand difference products that are lined up along the route to the milk, and then from the milk to the check out line.
Imagine being able to leverage the same Amazon recommendation engine in other places and industries. For example, in a restaurant you can view what other people have ordered recently, what other people liked and disliked, what the most popular items are, and what other people have ordered after ordering a specific dish. Or in a coffee shop where you could see instantly what your friends have ordered, or recommended. And then with a mobile payment solution integrated, you can then leverage your mobile phone to make the payments for items. For example, pay for your meal at your restaurant with your mobile phone, or pay for your favorite coffee with your mobile phone.
So what do you think about these potential areas where Amazon could disrupt the mobile space? Do you see any other ways Amazon could disrupt the mobile market, or any other market space?