It’s easy to make a small fortune in the smartphone business. Just start with a large fortune.
Only two companies, Apple Inc. and Samsung Corp., make much money selling smartphones. Every other player -- HTC, LG, Microsoft, BlackBerry -- is either in the red or just breaking even.
So the smartphone business is ideal for Amazon.com. The giant online retailer has money to burn, lots of matches, and a well-named new handset, the Fire.
This quirky-cool device is priced at $649 full price or $199 with a two-year contract and 32 gigabytes of data storage. You’ll pay $100 more for the version with 64 gigs, and you’ll pay it to AT&T Inc., presently the only cellular carrier that offers the Fire.
Amazon’s engineers have delivered the features you’d expect in a top-line superphone -- a largish 4.7-inch screen, a crisp high-res camera, a snappy quad-core processor chip. But they’ve layered in an array of uniquely Amazonian features, meant to set the Fire apart from its rivals, and to advance Amazon’s long-term goal of becoming the world’s ultimate retailer.
That’s the purpose of Firefly, the new phone’s audio-visual recognition system. Firefly uses the phone’s rear-facing camera and microphone to identify everything from printed text to the titles of popular songs. Point Firefly at a business card, and it picks out the phone numbers and e-mail addresses, so you can quickly call or write the person. Too bad Firefly doesn’t store the card data in the phone’s address book, but that’s not what it’s for.
Firefly’s true purpose becomes clear when you point it at a book or a music CD or a bottle of hand lotion -- almost anything with a pricetag. Up pops an option to buy the same item via Amazon. Well, almost the same item. Firefly frequently gets it wrong -- suggesting powdered Arm & Hammer detergent instead of the liquid version, or regular Kikkoman soy sauce instead of the low-sodium kind.
It did much better identifying movies by listening to the soundtrack. Not only did Firefly recognize “The Hunt for Red October,” it correctly named the actors in the scene I was watching. And of course, it urged me to buy the DVD.
Firefly is designed for “showroomers,” people who shop at retail stores, then purchase the item for a lower price online. A recent Gallup survey found 6 percent of Americans do this routinely. A tool like Firefly could nudge the number higher, but only if it gets better at identifying products.
To further sweeten the pot, Fire buyers get a free one-year subscription to the Amazon Prime shopping service, which includes free two-day shipping for most purchases, online streaming of thousands of free movies and TV shows, and free listening to a music library of one million songs. Amazon usually charges $99 a year for all this, so it’s decent value.
The Fire’s most radical feature, called “Dynamic Perspective,” is more clever than useful, but it’s very clever. Four cameras inside the corners of the phone track the angle between the phone and your face. Then the Fire adjusts on-screen images to create a 3-D-like sense of depth. It also lets users control the phone by tilting or turning the handset. The system’s a bit twitchy at times, but works pretty well. Still, it’s just eye candy, with little real-world benefit.
For all its sophistication, I bet consumers will shrug at Amazon’s new phone. We’re all locked in to Apple iOS devices, and those running Google Inc.’s Android software. The Fire offers no compelling reason to change, and one very good reason not to.
Like Amazon’s Kindle Fire tablet computers, the Fire phone runs a drastically modified version of Android, so it’s exiled from Google’s official app store. There are no Fire versions of many popular apps. Google’s own Maps app isn’t here; neither is the Chrome browser. Yes, there’s a way to smuggle Android apps onto the Fire, but few consumers will take the trouble. It’s already happened with the Kindle Fire tablet, which has a pitiful 1.9 percent share of the market. I expect the Fire phone to join its big brother down in the cellar.
Still, the Fire’s got a decent future ahead as a loss leader, an unprofitable product that gets customers into the store. Amazon might slash the price or even start giving them away to Amazon Prime regulars. Amazon’s out to build a large fortune in retailing; it can easily afford the small fortune it’s going to lose on this phone.