What Would an Amazon Smart Phone Mean?

Amazon.com Inc. is testing a smart phone, the Wall Street Journal reports, though it isn't clear Amazon definitively has concluded to market such a device. If Amazon does decide to get into the smart phone business, which one might characterize as yet one more way Amazon is trying to create a massive installed base of content consumption devices, that move could come late in 2012 or early in 2013.


The ramifications could be significant, though it also has to be noted that would-be contenders in the tablet and smart phone markets stumble frequently enough that it isn't so clear what the impact might be. 


Aside from the obvious matter of greater competition in the mobile device market, any such move by Amazon would change strategic thinking at rival firms. It might go without saying that a robust content or app ecosystem now has become an important part of the value proposition for tablets and smart phones. 


An Amazon entry into the smart phone business would heighten that aspect of the competitive landscape. Where Google and Apple have been competing in both "apps" and content, Amazon would add a new potential niche of sorts for content-driven competition. 


In fact, that might be one of the more-important implications. Where mobile service providers have competed on the basis of value and price for a basket of features anchored by voice and text services, handset suppliers have competed on the basis of application richness.


Amazon conceivably could create yet another approach or segment of the market oriented around content consumption, with a heavy slant on books, magazines and printed content, rather than music or video. 


For Amazon, the fact the voice communications and messaging are available would be only a part of a value bundle anchored by content consumption.


For service providers, the bigger concern might be that any such Amazon move could prompt a response by Google or Apple, Facebook or some other entity that similarly might change the traditional mobile services context. What any of those competitors could do is redefine "what" mobile service "is," and what features are part of mobile service.