1. Amazon already has an ecosystem. (The ecosystem ranges from the digital to the physical, and is primary reason other mobile phone makers are held back.)
2. They don't need to win the race. They are positioning themselves for when hardware is truly accepted as part of a company's platform.
3. The Fire Phone is designed for show-rooming. Amazon is bring the physical to their digital. (They are not trying to morph a physical location to the digital. So the lack of Bluetooth LE is not really a show stopper.)
4. Gives them vertical control to the costumer experience.
5. The cost is actually cheaper despite the sticker-price. It's 32Gigs and a 12month Prime subscription ($99) for $199 or $650 (off contract). Comparable phones are 16gigs and don't come with free subscriptions.
The Not So Good:
1. Users a costumed to level of excellence with core apps (maps, mail etc) may get disappointed with core features expected from a phone. (Although the Apple Maps issue didn't deter sales.)
2. Core apps are missing. (But still a large enough App library that Blackberry signed a deal to use their App Store. Effectively making Amazon the true third mobile platform.)
3. Dedicated to Amazon. (It's the same negative Apple shares, and the Fire seems positioned to the Amazon loyalist. So this one may not be so bad.)
The Fire may lack mass market appeal, but at its sticker-price point it's not meant to be a mass market phone.
I think it's an interesting first step, and I am curious to see how this plays out. For instance, if the telcos do decide to remove subsidies (the day it snows in hell), Amazon will be in a very good position to benefit due to their ecosystem.
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