Daily Dose of iQ: Amazon's New Fire Phone Built to Consume Amazon Content

Yesterday (June 19), Amazon unveiled its new Fire Phone in a big event in Seattle. As Mashable reports, the phone will be available July 25 (preorders have already begun), it will be exclusively offered via AT&T, and will cost $200 (32GB version) and $300 (64GB) on a two-year contract.

What are the phone's unique features?

The biggest selling feature is its 3D display, which employs "Dynamic Perspective" technology (pictured above) to achieve a 3D effect. The phone has five cameras (1 rear-facing and 4-front facing) -- the front facing ones are built to detect the user's head. The head detection, according to CEO Jeff Bezos, lets the phone "pick the best two (cameras) for stereo vision," based on your head position, low light, etc.

The Fire Phone's unique features don't seem that great.

Bezos touted a hands-free tilt-to-scroll feature as well, but that's not unique: The Samsung Galaxy S4 had that over a year ago.

The Fire Phone introduces a "Firefly" button that, sort of like Shazam, lets you scan a photo of an object and buy it on Amazon. The phone also offers free, unlimited photo storage on Amazon Cloud (videos not included). 

What doesn't the phone have?

Apps. This is a big one. Earlier this week (June 16) Amazon announced it has over 240,000 apps in its Appstore. iOS and Android have roughly 1.2 million each. This is similar to the uphill battle Windows Phone and BlackBerry have faced in the app game (and we know how poorly they've fared lately).

Why is Amazon making a phone anyway?

It's safe to assume Amazon is trying to duplicate the success it's had with its Kindle Fire tablets with a smartphone. Well yes, but not just that.

Amazon is unwilling to share content revenue with Apple or Google. It built a phone to control its own content experience.

Amazon made a phone to allow users to more easily consume Amazone content: books, music, movies, TV shows (some of which it is now producing in-house, like Netflix), etc.

"Amazon seems compelled to make a phone largely because there’s lots of friction for its customers trying to buy things through Amazon using iPhones or Galaxies," wrote Joshua Brustein of Businessweek (June 18). "You can’t buy a Kindle book through the Kindle mobile app because Amazon is unwilling to share the revenue of that cost with Apple or Google. With its own phone, Amazon can control the entire experience."

It also wants users to buy more easily and often from Amazon.com, of course. Hence the Firefly feature described above.

OK, who is going to buy this phone?

Good question. Because nearly everybody already has a smartphone, who would be compelled to switch to a Fire Phone?

The Fire Phone is based on Android, but it cannot access the full slate of Android apps.

No one, according to Wall Street Journal columnist Christopher Mims. He writes:

"The central problems with the Fire, the factors that will kill its sales as surely as they have held Windows Phone to single digit market share in North America, are these:

1. People are loath to switch from the phones they already have, and in the process abandon all the apps and media they’ve bought.

2. The North American market for smartphones–and especially the market for high-end smartphones like the Fire — is heavily saturated, which means there are hardly any new users out there who might adopt the Fire as their first phone.

3. Fire can’t access the existing pool of Android apps. It’s missing critical ones like Uber (Bezos says it’s coming) and Snapchat (no word on when it will appear)."