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Why Amazon Won’t Repeat The Facebook Phone Debacle

The smartphone industry is one of the most ruthless battlegrounds in tech, governed overwhelmingly by Apple and Android’s operating systems. Just ask Facebook. Mark Zuckerberg’s company was the last major tech firm to attempt to compete with its own mobile ecosystem, and it found its Home product nearly dead on arrival.

On Wednesday, Amazon is expected to roll out its first smartphone at an exclusive company event in Seattle, and while some industry observers like T-Mobile CEO John Legere are predicting a repeat of the Facebook disaster, it may not be so simple.

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John Legere @JohnLegere

Whew! @Amazon doesn’t know what they just signed up for. Remember the Facebook phone? #yikes

7:24 PM - 17 Jun 14

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The biggest problem with last year’s Facebook-branded HTC First and Facebook Home platform — known as the “Facebook phone” — was simple enough: Nobody really wanted it to begin with. Simply put, even though many users allow Facebook to act as a gateway to their browsing, they don’t want Facebook to replace their internet or rule their homescreens. The fastest-rising social networks now are a legion of mobile messaging apps, each with their own specific use case. Even enthusiastic Facebookers made it clear they didn’t want a smartphone where the social platform is governed solely by Facebook. And Facebook, it appears, has learned from its mistake, and is now unbundling its apps by use-case.

But while Facebook’s digital ecosystem was centered around social engagement, Amazon’s will likely be centered around content and actual, physical products. As a retailing giant and a content delivery company, Amazon’s ecosystem isn’t trying to change its customers’ sacred social behaviors, but their purchasing ones.

And while that’s still a heady task, users are far less loyal about content and commerce than they are about their social networks. Take streaming services: People go where there is more, and better, content. And Amazon, with its huge retail arm, its Prime service, which now includes a streaming music and video, its Kindle and Fire TV archives with 240,000 apps and games, and Dash, a barcode-scanning wand that automatically restocks household items, the company has created a formidable ecosystem that’s been waiting for a phone to tie it and its 250 million customers together for years now.

Take this example, proposed by the New York Times’ David Streitfeld:

For instance, say you bought a new camera on Amazon, searched for hotels in Florence, Italy, and downloaded a timetable for Italian trains; the company could ask you, Would you like to buy this passport holder? Special price, today only.

That said, Amazon faces a steep uphill battle. Google and Apple have both made significant strides strengthening their respective ecosystems and making life easier for those who choose to consolidate their electronics under one logo. It’s by no means impossible to switch, but with every iteration, Apple and Android are giving their customers more and more reasons to stay in the family.

And there’s the simple question of interest. A March 2013 Retrovo survey of 3,269 online consumers — the same survey that suggested that almost nobody genuinely desired a “Facebook phone” — showed little public interest in an Amazon phone. Amazon has ramped up its digital offerings quite substantially since then (Retrovo has also since been acquired and no longer runs these surveys), but it’s no doubt worth inquiring: Is anybody really asking for an Amazon phone?