News reports spread recently across the globe – the new, long-awaited Amazon’s smartphone was to be released. The Amazon Fire Phone is the latest addition to the company’s popular product offering of Kindle readers and tablets.

Consumers will get the new phone on their hands during July. There was not yet any publicized release date for Europe as of writing this. The launch Fire Phone has been hyped as the next big thing in e-commerce, and the final nail to the coffin of physical stores. So, what’s all this about?

Ubiquitous shopping

Fire Phone’s e-commerce feature is called Firefly. The system has been described as a (very expensive) ticket to a virtual shopping mall.

Firefly is kind of a visual search engine that uses images, audio, bar codes, phone numbers, and other stuff. It can use the information to detect real-life products and guide to user to the corresponding product page in the Amazon’s online store.

One of the key ideas of Firefly is to bring machine learning to online shopping. The system is programmed to become constantly more intelligent in recognizing products at its vicinity. Firefly, which already recognizes around 100 million products according to Amazon, will learn to identify products regardless of the situation or environmental factors such as lighting.

Amazon’s massive product database and e-commerce platform are truly great competitive advantages, and they have certainly contributed significantly to the company’s bold decision to enter smartphone business. In this way, Amazon can provide their customers with a mobile digital platform that is tied to their brand and online store. The end result is a stronger customer relationship. Well, to put it more bluntly: Jeff Bezos wants to change the every moment of your life to an opportunity to buy something from him.

Threat to Google and mom-and-pops alike

An important aspect in the development of Firefly seems to have been the desire to create replacement for Google in terms of searching products online. Amazon doesn’t want to be at mercy of Google, nor do they want to pay Google for products ads.

Google is known to have weakened the visibility of some online stores in the search results when the stores did not agree to pay for AdWords. Amazon took these stores under its wings, and the company is now trying to fully displace Google search. It’s quite telling that Amazon reportedly uses Bing as their search engine and Nokia’s maps.

Besides the battle between Amazon and Google, Fire Phone is threatens the very existence of traditional physical stores. Even now customers have the tendency to check and test products in the physical store, but order them online. Fire Phone brings this phenomenon to a new level. Found a nice product at the store, but not the right size? Just firefly it and order in few seconds from Amazon. Or, just check if you can get a better deal on this and that product from Amazon – most often the answer is positive. All this with a press of a button.

When this vision is connected with the Amazon’s constantly evolving and quite futuristic delivery methods – the implementation of which has met regulatory barriers, though –  it quickly becomes obvious that physical stores stand no change in this competition.

One possible scenario is that if Fire Phones become popular, stores could prohibit customers from using them inside the store. There has been some general skepticism regarding the Fire Phone, not least because Amazon seems to put the cart before the horse. For the concept to work, the phone needs at first to have a lot of users – but there’s still not even that many applications for the Amazon’s customized version of the Android operating system.

Will Fire Phone succeed?

Fire Phone’s innovations are not limited to e-commerce. There’s also the possibility to use the phone without touching the screen with your hands, or by using facial gestures. The new Dynamic Perspective technology brings depth dimension to the screen.

It has been pointed out, however, that there are sensors in other phones as well, and 3D features might not be a resounding success for smartphones.

Besides the lack of applications, Amazon has been criticized because of the phone perceived high price ($ 649). It seems likely that Amazon is going to publish a more affordable lite version of the phone, the same way as it did with the Kindle Fire tablet.

It is quite possible that the Fire Phone proves to be too expensive for early adopters, and not that interesting for the rest of consumers. Time will tell.

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