Maybe Amazon Fire is Not Supposed to Be About Smartphone Share

Consumer Intelligence Research Partners has estimated that roughly 40 percent of all Amazon shoppers own a Kindle device and that those shoppers on average spend $1,233 with the retailer annually, which is $443, or 56 percent, more than the $790 non-Kindle owners spend with the retailer each year.

CIRP surveyed 300 Amazon.com shoppers online from Nov. 15, 2013 to Nov. 18, 2013,  about their Amazon purchasing behavior in the previous 90 days. As more retail activity starts to happen on smartphones, something like that also could develop for Amazon-centric smartphones.

It’s a gamble, to be sure. It is a management distraction, to be sure. But the objective might not be so much “competition with other smartphone suppliers” as “competition with other major retailers,” including Apple and Google, to name a few.

The prediction that Amazon is too late to make a dent in smartphone market share is reasonable enough. Some might say Amazon has failed to take lots of share in the tablet market, as well.

Amazon arguably is playing a different game. It might not so much want to be a leading force in tablets or smartphones so much as it wants to secure greater share of the online retailing market.

It is true that Amazon retail operations can be conducted from non-Amazon devices as well as its own. But Amazon might rightly believe that its most-loyal, or biggest-spending customers, tend to use Kindles or might use an Amazon Fire smartphone.

It is a gamble. But we won’t know the outcome for some time. Amazon’s experience with tablets might be the template.

“One way to look at the Kindle Fire and Kindle e-reader is as a portal to Amazon.com,” says Mike Levin, partner and co-founder of CIRP. “Kindle Fire provides access to everything Amazon sells, while the Kindle e-reader has become the way that Amazon customers buy books, Amazon’s original product line.”

Amazon Fire might not be as important as Amazon Prime as a driver of  loyalty or repeat buying behavior. But it might not be insignificant, either.

U.S. retail spending on mobile devices is expected to reach $57.8 billion in 2014, representing 19 percent of total e-commerce sales, according to eMarketer. That is more than double the dollar figure spent in 2012. By 2018, eMarketer sees mobile commerce rising to $132.7 billion or 27 percent of e-commerce sales.

Amazon Fire is a gamble on snagging more of that growth.
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