Amazon.com Inc plans to expand its mobile platform and broaden its offering of devices beyond e-readers and the Kindle Fire tablet, analysts, developers and retail partners said ahead of results next week from the world's largest Internet retailer. Amazon is to introduce up to five or six tablet SKUs, or stock-keeping units, according Demos Parneros, president of US Retail for Staples Inc, which sells the Fire.
The tablets will be different sizes, including a 10-inch model, Parneros said. Amazon spokespeople declined to comment on the company's plans. Amazon is making its own tablets to help the company sell more digital goods, such as MP3s, movies, TV shows, apps and games. Physical versions of these products, such as CDs and DVDs, were a big business for Amazon, but they are now in decline.
Having its own devices sitting atop a software platform that offers digital content to more than 100 million, credit-card-wielding customers already programmed to buy, could help Amazon become a major mobile platform player, challenging Apple Inc, Google Inc, Microsoft Corp and Facebook Inc.
"You're seeing the Apple play book recreated by everyone else who wants to play in the mobile device ecosystem. Amazon is the latest entrant," said Niccolo de Masi, chief executive of Glu Mobile Inc, which develops mobile games for the Fire. "The Kindle Fire is off to a great start," he added. "We will be supporting all new devices that have promise. They are trying to build on the foundations they have."
Amazon launched the seven-inch Fire in September, so the company has almost a year of data on the spending habits of these tablet owners. If they have increased purchases of digital goods through the device, that may embolden Amazon to introduce other devices, such as a larger, more expensive tablet and even a smart phone, analysts and others said. "Amazon will keep working on this path of providing mobile devices and tablet devices," said Giordano Contestabile, an executive at PopCap, a unit of Electronic Arts whose games include: Plants vs. Zombies, Bejewelled and Peggle on the Fire. "We're all waiting," he added.
Purchases of Amazon e-books surged after the company introduce the Kindle e-reader in 2007, Citi Research analyst Mark Mahaney said. "If a device can do that to their oldest, stodgiest category, imagine what else can benefit from a smart phone," he said. Mahaney's Taipei-based colleague Kevin Chang told Citi clients in November that an Amazon smart phone would be launched in the fourth quarter of 2012.
Amazon is expected to report second-quarter results on July 26. During a conference call after first-quarter results in April, Evercore analyst Ken Sena asked what traction the company was getting from the Fire and what the thinking was around a Kindle smart phone.
Amazon Chief Financial Officer Tom Szkutak dodged the smart phone question, but said the Fire was spurring purchases of "a lot" of digital content.
"We are very pleased with what's happening," the CFO added. Since the Fire came out in September, Amazon's share of the video market has climbed to 13 percent from 10 percent, according to The NDP Group. In music downloads, Amazon's share rose by one percentage point to 14.4 percent, NPD data show.
"They haven't grown exponentially but that's a healthy gain post the Kindle Fire," said Russ Crupnick, senior entertainment industry analyst at NPD.
Recent job postings by Amazon's Lab126 research and design center in Silicon Valley suggest the company is working on new mobile devices that will run on wireless carrier networks.
Gregg Zehr, a former hardware developer from Apple and Palm, heads Lab126, which is based a short drive from Apple's headquarters in Cupertino, California. Lab126 had just over 500 employees listed on the LinkedIn professional network in September, when Amazon launched the Fire. That has grown to 865 as of mid-July, including 792 in the San Francisco Bay Area, according to LinkedIn. An Amazon spokesman declined to comment about Lab126.
Comments
Comments are closed.