How Amazon Is Trying To Create A Huge Mobile Business

Ashesh Shah
August 21, 2018
460 Views

U.S. mobile commerce is exploding. Amazon, as a leading ecommerce site, is set to grab a big chunk of that.

But when it comes to mobile, Amazon’s ambitions are anything but limited to ecommerce.

Recent reports from BI Intelligence detail Amazon’s mobile ambitions, analyzing everything from the potential impact of a rumored Amazon smartphone to Amazon’s ability to become a huge player in mobile advertising.

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Here’s a brief overview of Amazon’s mobile ambitions:

Tablet Sales: Amazon’s Kindle tablets and Android tablets had a big third quarter last year. Kindle shipments, including e-readers, jumped 104% in the quarter, likely helped by the early September launch of the new Kindle Fire tablet line and the fact that the 7-inch version began shipping that month. It’s tablets priced very competitively. With the release of the Nexus and the iPad mini, the competition has never been hotter.

Software sales: The Amazon Appstore has been a huge success on the Kindle Fire. Developers make almost as much revenue per active user as they do on iOS. Google Play has many more users, but it does not generate substantially more revenue in the U.S. than the Amazon Appstore. Apple executives reportedly worry that Amazon’s controlled, iTunes-like approach makes it more competitive than other app stores, including one operated by Google. Given strong early results, Amazon shouldn’t have a hard time convincing developers to bring their apps to an Amazon phone.

Media sales: The Kindle Fire is best understood as an interactive catalog which drives sales of all sorts of Amazon products. The Kindle ecosystem includes ebooks (Kindle app), music (Amazon MP3), movies and TV shows (Amazon Prime), and apps. Almost 50 million Americans visited an Amazon site on their smartphones in July. Over 86 million U.S. smartphone owners accessed a retailers’ app or mobile site, meaning 47% went to an Amazon property. The next largest smartphone draw was eBay, which had 33 million visitors with a reach of 31%.

Smartphone Sales: Amazon continues to push forward with the makings of a smartphone platform. The potential platform has been widely rumored but not yet confirmed. The beginnings of a platform strategy are coming together: a recent purchase of 3D mapping startup UpNext, last year’s acquisition of voice recognition software creator Yap, and the launch of a prepaid wireless service in Japan. However, big questions remain about its ability to build out and manage a software platform and design the hardware to deliver it.

Mobile ads: Amazon has the potential to be a huge force in mobile apps development and advertising. Data is the lifeblood of online advertising and Amazon has a unique data trove. It’s not just data on what people like to buy, but data on what recommendations work in getting people to buy things.

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