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Amazon Hinting That a Smartphone Is Coming?

Thursday, 12 Jul 2012 | 3:14 PM ET
Amazon’s Kindle Fire
Amazon’s Kindle Fire

Amazon's new gaming platform for the Kindle Fire has a curious new feature that hints the company may be working on more Kindle Fire devices, such as another tablet or a smartphone.

The new platform named GameCircle, which rolled out Wednesday, shares similar features with Apple's social-gaming network called Game Center.

But Amazon has tapped into its cloud power to offer players something Apple does not; a syncing capability that saves all the player's information securely to the cloud.

Basically, syncing allows players using Amazon's social gaming network to save games on the cloud and return to the games right where they left off. More noteworthy, however, is the feature also allows users to sync a game and switch "between Kindle Fire devices" to return to the game.

Catch that? The statement is curious because currently there is only one Kindle Fire device on the market, the tablet; So a syncing feature doesn't seem like it would be that helpful unless a person owns more than one Kindle Fire, or unless Amazon has future plans to roll out more Kindle Fire devices, such as another tablet or a smartphone.

The new syncing feature caught ABI Research Analyst Aapo Markkanen's attention, who said that a smartphone is the logical next step for Amazon, but that the company is more likely to roll out an upgraded Kindle Fire tablet first. An Amazon smartphone will most likely not launch until the first quarter in 2013, he said.

"That's one of the key advantages of the cloud, storing content that can migrate from device to device," Markkanen said. "It's a natural extension to add more devices to the mix."

GameCircle's syncing feature is a strong indication of what Amazon is going to do in the future, Markkanen said. As devices continue to be connected to the cloud and content can be shared across the various mediums, Internet firms are looking to expand their reach.

"All of the major players (including Amazon) are looking at TV's. They are all aiming for the living room," he said.

But before a TV rolls out, Amazon could shake up the mobile world.

"Amazon has the potential to be one of the most disruptive companies in the mobility sector and it's just in its early stage of this," Markkanen said.

Because Amazon is the dominant player in the cloud space and has several ways it could subsidize cost and bypass carriers, Amazon is well-equipped to compete in the smartphone arena, said Mike Morgan, a smartphone analyst for ABI Research.

"Amazon owns the cloud," said Mike Morgan, a smartphone analyst for ABI Research. "They have the potential to offer something different to change the basis of competition ... Amazon has the potential to bring something new to the table, a new way to distribute, a new way to subsidize."

As content consumption continues to grow in the mobile space, Amazon's Cloud Drive service, which allows up to 5GB of free storage to stream music and media, definitely has a niche to fill in the mobile realm, say experts.

"The value is in the data or the data experience," Morgan said. " You will be able to play content on any screen that you are playing. That's the whole philosophy of the cloud system, it's device agnostic."

What's more, an Amazon smartphone would essentially bring the ecosystem together allowing users to access their Cloud Drive, the Amazon store and basically the entire e-commerce realm through a mobile phone.

Unlike Apple and Android, Amazon may be able to bypass carrier contracts by subsidizing the cost of the phone via advertising and other methods.

Like Kindle Fire, Amazon could subsidize cost by integrating the Amazon storefront on the phone, basically ensuring Amazon's retail experience is always the users first place to shop, Morgan said.

The company may also leverage their Amazon Prime program to entice smartphone users to make more purchases from the retailer on their mobile device, he said.

Amazon's Prime program offers two-day shipping on select items, access to free streaming movies and TV shows, and one free book to borrow each month from Kindle’s lending library. Amazon could require customers to sign up for their Prime program for a year or two to help subsidize the cost.

"It might be possible through Amazon's model, operated through their own cloud and through their own storefront, which offers subsidization, to change the way smartphones are distributed," Morgan said. "The potential is there for them change how the game is played."



email: tech@cnbc.com

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