I’ve been avoiding the topic for months now, I’ll admit. Amazon has slowly introduced more and more hardware components as springboards for their products and services. The thinking behind it is sound. Take the Kindle. They don’t sell them to make a profit on the device, rather they want you to buy a boatload of books. Similarly, Amazon isn’t selling FireTV to make money off an STB, but all the content you’ll stream. Why is it then that people are having a hard time with all the rumors surrounding the development of a smartphone. When you think about everything they’re purported to be baking into it, it makes perfect sense.
About that hardware: The phone’s going to be chock full of sensors and armed with 6 (yes, six) cameras. An array of sensors mated to a innovative parallax-like 3D user interface with exposed menus aims to be a perfectly immersive experience. If–like their other devices–the goal is to keep you on it and using it, then what better way than to pull the user into the device and encourage a whole new level of interaction. So you give away the phones at cost, and you go after the dollars that people spend while using their devices. Since we take phones with us everywhere we go it’s a no-brainer.
As the average person uses his or her phone more and more as a way to spend money, Amazon probably sees a way to profit from this. Amazon tablets run Android and it’s managed to score many of the major apps people care about in its own app store. An ecosystem indeed.