Dive Brief:
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To much fanfare, Amazon CEO Jeff Bezos Wednesday unveiled his company’s new smartphone, the Amazon Fire, which has a host of capabilities that will be especially useful to the company’s Prime members.
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The phone offers an impressive cloud service that automatically backs up photos, a 3-D display, and the retailer’s touch-of-a-button Mayday service that allows users to immediately interact with a customer service agent, among other amenities.
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For competing retailers, the most interesting feature is likely the phone’s “Firefly” capability, which allows users to take a photo of pretty much any object and buy it on Amazon.
Dive Insight:
One of the biggest surprises stemming from the unveiling of Amazon’s much-anticipated Fire smartphone is the device’s price — a premium $200 with an AT&T contract or $650 without. Many observers expected the e-retail giant to stay on the path of offering heavy price breaks to sneak by the competition.
Most worrying to competing retailers is the Firefly capability, where a user could snap a photo of an item at, say, Target, but buy it on Amazon. But that brings to mind Amazon’s offer of a few years ago that sent readers to their local booksellers to receive an added discount if they bought the books on Amazon — a promotion that backfired due to heavy criticism from consumers and authors alike.
With sales of premium smartphones on the decline, it’s difficult to know whether Amazon’s pricey Fire will spread or die out. In any case, retailers should be thinking about how to compete in case it rages.