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U.S.-based online retail giant Amazon.com is set to unveil its long-expected first smartphone this week, and according to reports, service for the device will be offered exclusively by AT&T. The U.S. operator is already the sole service provider for Amazon’s Kindle devices. The forthcoming phone is expected to have innovative features, including a screen that allows 3-D viewing for certain applications, and to use a version of Google’s Android operating system that does not connect to the Google Play store. Users would have to buy proprietary apps directly from Amazon.
The high-end handset business, dominated by Samsung and Apple, is a difficult one to break into, so Amazon is taking on a major challenge with this bold move. For AT&T, though, the exclusive carrier arrangement, which extends its existing relationship with Amazon, would appear to be all upside. The Amazon phone, which is likely to have capabilities that set it well apart from its competitors, should help AT&T attract new customers—even among those who already have contracts with other operators but are curious about the hologram-like effects of the 3-D screen. Since the U.S. mobile market is currently in an intensely competitive period—with T-Mobile engaged in an aggressive campaign to take business away from number-one ranked Verizon and number-two ranked AT&T and third-ranked Sprint pursuing a merger with T-Mobile—any competitive advantage should be particularly prized.
As for Amazon, the company is well known for its willingness to invest money in devices in order to drive business to the products and services available through them. It has pursued this strategy with its Kindle e-readers and tablets and appears poised to do likewise with its smartphone. The apps for the phone will be created and marketed by Amazon, and the Amazon Prime music-streaming service will also likely be available through the phone. Finally, Amazon has traditionally kept its device prices low—at or near the break-even point. If it does so with the new phone, that strategy should help drive sales for the retailer while also helping AT&T attract customers who want a high-end smartphone without paying a high-end price.
The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week : http://www.tarifica.com/storyoftheweek.aspx
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The high-end smartphone that internet giant Amazon plans to launch later this spring will likely come with sponsored LTE data from U.S. operator AT&T, according to reports. While few details have been released, the plan, which will be called Amazon Prime Data, would allow AT&T customers to stream Amazon’s content—TV, movies and music—over their Amazon smartphones, without it counting against their LTE data allotments.
While Amazon’s upcoming smartphone is rumored to have many game-changing advanced features such as a 3-D effects and gesture-based interface options, the real draw for users may well be the free data for access to Amazon’s high-data-consumption branded entertainment offerings. Amazon has followed this strategy before: It has always offered free 3G data for its Kindle readers, and in 2012 it offered 250 MB of LTE data per month for the Kindle Fire HD device for an annual fee of $50. In short, the company realizes that access to data is what the its content business hinges on, and it is willing to do a deal with a major mobile operator to get it. Providing consumers with data opens the door for Amazon—and other similar internet-based entities—to charge consumers for the actual content.
From the point of view of mobile operators, this development, if it actually goes through and proves successful, would constitute yet another piece of evidence that partnering with large entities like Amazon will be an increasingly attractive option for revenue generation. And considering that the FCC, a U.S. regulatory agency, is expected to soften its net neutrality restrictions in the new rules that will be announced on 15 May, the climate is likely favorable to the proliferation of special-access data arrangements between operators and content providers.
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The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week : http://www.tarifica.com/storyoftheweek.aspx
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