Amazon’s Expected Smartphone Is About Much More Than Hardware

Source: Thinkstock

Source: Thinkstock

Amazon (NASDAQ:AMZN) is expected to launch a smartphone on Wednesday at an event in Seattle. As The New York Times reports, a smartphone would represent the final step in the e-commerce giant’s transformation into a tech company. That transformation has entailed investments in a huge variety of endeavors — from building a network of warehouses for fast shipping, to popularizing e-readers with the Kindle, to developing its own tablet, the Kindle Fire.

As The New York Times points out, the list of companies that consider Amazon a competitor is continually growing, with Walmart (NYSE:WMT), eBay (NASDAQ:EBAY), Google (NASDAQ:GOOG), and Apple (NASDAQ:AAPL) all interested in knowing what Amazon’s planning next. The rumored move to introduce a smartphone is of particular interest, not least of all because the introduction of a successful smartphone is something that even a few true tech companies have failed to achieve.

Google and Facebook (NASDAQ:FB) both launched phones that failed to gain traction in the market, while Microsoft’s (NASDAQ:MSFT) Windows Phone continues to struggle to gain market share, and BlackBerry (NASDAQ:BBRY) has fallen far from its position of dominance. Together, Samsung (SSNLF.PK) and Apple accounted for two-thirds of smartphone shipments in the U.S., as reported by PCMag, and the leading operating system was Google’s Android, with Windows’ phones accounting for just under 4 percent of shipments.

Amazon’s move to introduce a smartphone represents a high-risk investment, but potentially offers Amazon the ability to sell to customers without a middleman. Increasingly, accurate technology to track users’ interests and web searches will eventually allow companies like Google, with its Android operating system, to send consumers mobile suggestions on where to buy things online or in the real world.

Amazon will look to combine that capability with the barcode scanning and voice command-enabled Amazon Dash, designed to integrate with AmazonFresh and to enable users to quickly find and purchase groceries from their home. That would be Amazon’s ultimate goal with its own smartphone: to make it easy for users to find and buy the things they want from anywhere they carry a smartphone (i.e. everywhere.)