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Amazon's Bruising Week
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progman2000
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progman2000,
User Rank: Ninja
7/26/2014 | 10:16:27 AM
Several of the investor websites I follow..
are starting to show a little concern over Amazon as an investment.  Mainly stemming from Bezos's interests not necessarily putting shareholder value first (described in some circles as even being 'arrogant').  As a consumer I am tied to Amazon at the hip.  No way I am buying their phone though.
jastroff
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jastroff,
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7/27/2014 | 12:33:30 PM
Re: Several of the investor websites I follow..
Most of us who have been in any kind of product development know that this kind of departure from what exists is either very foolish or very smart. Often the former.

So, if we know that Amazon is a smart company, what's the reason from reinventing the wheel, so to speak?

>> More significantly, the Fire Phone doesn't use the standard Android user interface. Amazon has substituted Google Android entirely with its own version. Rather than presenting apps and widgets on home screens, the Fire Phone uses a rotating carousel and something it calls Dynamic Perspective (camera-based 3D UI). Other features include Firefly, which can be used to search for purchasable products, the Amazon Appstore, and gestures for interacting with the software.
stotheco
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stotheco,
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7/27/2014 | 1:55:59 PM
Re: Several of the investor websites I follow..
Amazon is my go-to when it comes to online shopping. Not their marketplace or third party sellers (unless I have no choice), but I choose Amazon because of their service and they're really already a well-oiled machine at this point. But like you, I won't buy their phone. They should probably just stick to what they're great at and continue building on that. And if they want to expand to these other niches, at least come up with a phone with features that people would actually use or find useful.
Gary_EL
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Gary_EL,
User Rank: Ninja
7/27/2014 | 10:48:20 PM
Re: Several of the investor websites I follow..
Yes, investing for the future is a great thing. But, there comes a point in time when investors want to see some profit. it looks like that time has finally arrived for Amazon.
nasimson
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nasimson,
User Rank: Ninja
7/28/2014 | 12:40:00 AM
Re: Several of the investor websites I follow..
Amazon is a great services company. It's not even an OK devices company. So the better option for Amazon is to do device partnerships with likes of Microsoft, Huawei or Leno than to procure and market its own devices. Even Google is playing out smartly despite Motorola's acquisition. It only launches one phone a year and that too in partnerships with LG or Samsung just to demonstrate its capabilities.
nasimson
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nasimson,
User Rank: Ninja
7/28/2014 | 12:43:06 AM
Re: Several of the investor websites I follow..
Given the whimsical, unforgiving and shortsightedness nature of Wall Street, I see one more such mistake and the board will ask Below to step down.
progman2000
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progman2000,
User Rank: Ninja
7/28/2014 | 6:54:09 AM
Re: Several of the investor websites I follow..
It will be interesting to see.  Sometimes these things don't play out nearly like I thought they would...
SaneIT
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SaneIT,
User Rank: Ninja
7/28/2014 | 9:35:00 AM
Gimmicky UI
The last thing you want to hear about your Android based phone is that the UI is gimmicky.  I knew there would be trouble when I heard that it would be locked down to Amazon's app store.  That has been the kiss of death for several Android based devices.  When you can't install apps that all your friends are talking about it tends to be more than a little frustrating.  Add to that the fact that people already complain about the fragmentation of Android and Amazon was just digging themselves a hole.  Can they climb out of it?  Probably but it won't be a quick or easy process.

 

 
pcharles09
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pcharles09,
User Rank: Ninja
7/28/2014 | 9:49:52 AM
Re: Gimmicky UI
@SaneIT,

Sounds like the many experiences I had with the Windows Phone. When Android gets compared to a WP, that's never good...
SaneIT
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SaneIT,
User Rank: Ninja
7/29/2014 | 7:11:20 AM
Re: Gimmicky UI
I agree that being compared to Windows Phone is a bad thing.  I've test driven a few different Windows phones over the past couple of years and have been underwhelmed each time.  It was not because of the UI though, it was the lack of mainstream apps that both Android and iOS have.  I hate to break it to them but it's not the OS that makes the device it's the experience around the device and useful apps are a large part of that experience.  Amazon needs to figure out what they want the user experience to be and sell that feverishly. 
melgross
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melgross,
User Rank: Ninja
7/29/2014 | 3:31:38 PM
Re: Gimmicky UI
It does seem as though a flashy UI and advertising as to how advanced the phone is, is what Bezos wants. It's hard to sell another phone is these days. And this doesn't offer much when compared to the majors, and that includes Win Phone.
SaneIT
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SaneIT,
User Rank: Ninja
7/30/2014 | 7:49:03 AM
Re: Gimmicky UI
@melgross,

If that is what Bezos wants then he needs to be out there telling people why the flashy UI is better.  The most I've seen is a corny demo of their remote help application.  That doesn't make me want to run out and buy one.
melgross
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melgross,
User Rank: Ninja
7/31/2014 | 2:37:56 PM
Re: Gimmicky UI
He tried, in that overlong introduction to it. But it isn't all that great, according to every reviewer out there. He seems to have forgotten the negative response to 3D in general, and specifically to the illness reported from many people using them. I've read that while he thinks he's a product guy like Steve Jobs, he's not. That could be a problem.
SaneIT
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SaneIT,
User Rank: Ninja
8/1/2014 | 8:18:28 AM
Re: Gimmicky UI
I didn't catch the product launch so I didn't see the vision as presented by Amazon.  I don't see a lot of positive press about it either which tells me that Amazon isn't out in front of this pushing the marketing the way it will be necessary for the phone to gain traction. 
melgross
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melgross,
User Rank: Ninja
8/4/2014 | 5:53:36 PM
Re: Gimmicky UI
I read something that makes a lot of sense. The writer states that the buyers of this phone will primarily be Amazon Prime users. They will be getting that year of free Prime use. That brings the price of the phone down by $100. For everyone else, it's not such a great thing, as its purpose is to funnel people into buying from Amazon, with little else of great use. But that also makes any profit debatable.
pcharles09
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pcharles09,
User Rank: Ninja
7/29/2014 | 10:50:23 PM
Re: Gimmicky UI
@SaneIT,

I agree 100%. I can't tell you how excited I was when WP finally got an Angry Birds app. Unfortunately, it was so late in the game that no one was playing it anymore. That's usally how it goes.

Hopefully Amazon learns from these type of experiences.
SaneIT
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SaneIT,
User Rank: Ninja
7/30/2014 | 7:47:29 AM
Re: Gimmicky UI
@pcharles09,

I've been saying for years that eventually all of the mobile OSes will merge with their desktop counterparts.  Microsoft more or less laid this out as part of their game plan last week.  I suspect Google has the same roadmap with Android and ChromeOS and that Apple will bring iOS and OSX together as well.  This will help with the lack of apps on the mobile platforms but there still needs to be a push to be a desirable place to sell your apps.  I have people tell me all the time that they don't do Android apps because it's not worth the effort.  That confuses me a bit because it's not any tougher for me to get apps to the Play store than it is to get them to iTunes.  Those same people tell me they won't even look at Microsoft because it confuses them with Win8 and Win8phone.  Is it any harder to develop for the Windows platforms?  Probably not, it's just different and many developers don't want to bother with it.

 
pcharles09
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pcharles09,
User Rank: Ninja
7/31/2014 | 9:30:32 AM
Re: Gimmicky UI
@SaneIT,

I've heard that many times too. I think the iOS ecosystem has generated the most revenue so developers spend most of their time there. I've also heard that the Android & WP marketplaces are full of tire-kickers so devs don't really anticipate seeing a return on their investments.
melgross
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melgross,
User Rank: Ninja
7/28/2014 | 10:28:48 AM
Long term problems.
Amazon has put itself in a position where the likelihood of making significant profits is about nil. I remember Bezos telling us, a long time ago, what his business plan was, and it isn't what they are doing. Originally, his plan was to have a small team, those who wrote and maintained the website, or paying an outside company to do so, a small executive group, and people to interact with customers and suppliers. But, those suppliers were to ship all the ordered products. Manufacturers and fulfillment companies would do all the work, leaving massive profits for Amazon. But quickly, it was seen that this wouldn't work. There is way too much inertia between an order, and when a manufacturer or fulfillment company ships. This was found out long ago when the first big Christmas season hit the web stores all over. Late deliveries, wrong packages, no delivery, etc, were common. Amazon, and others, began to realize they had to do this themselves, and that changed his business plan forever. Massive warehouses and shipment centers became unavoidable, killing any hope of massive profits. As long as Amazon expands, they will need to open more of these, costing billions more. Then there is Prime. Prime has always been a loss leader for Amazon. As they continue to add services in the almost desperate attempt to get people to move to them, they offer all of the services others charge for, for "free". What does this cost them? Streaming music subscriptions cost between $10 and $15 a month for those companies offering them (and those companies still aren't making money). For many years they were a failure, until they understood that in order to compete with iTunes, they needed to give songs away for permanent ownership. But now, Amazon has raised Prime to just $79 a year. They are losing massive amounts of money just on those music services. But then there are movie and Tv services, books on Prime, free and expedited shipping, etc. Amazon could be losing $100, or even much more on each Prime customer a year. Possibly much more. So 10 million Prime users could cost them at least $1 billion in losses a year, possibly much more. Then, it's admitted they do no better than break even on devices, or lose money on each sale. Since people buy Amazon's devices because they are cheap, it's not likely they buy enough to cover those losses from marketing those devices. Likely, these people were already buying from Amazon, so there may be little incremental increase there. I believe the proof for what I say is the obvious non existence of real profits when they make any, and the losses when they don't. The problem for amazon is that their business is contingent on continuing these practices, along with low prices. Good for the consumer, but bad for the investor. Going by profitability, their stock is actually worth around $30, not $300. Someday, we may see it there. And, by the way, with a year's free subscription to Prime, the Fire phone is just continuing this sell it for break even policy we've been seeing. It's not likely they're making any real money on each sale.
Lorna Garey
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Lorna Garey,
User Rank: Author
7/28/2014 | 1:39:20 PM
Re: Long term problems.
I agree with a few of your points -- mainly, I think the winners are manufacturers that have actually been able to turn the tables and make Amazon their distribution arm, not the other way around. And, I think getting into smartphones without either making a really, really good device OR giving it away to customers OR bundling in some data was a tactical error. 

However, not so sure they're losing on Prime, esp as the price is now $99. I have Prime, and now, all things being pretty much equal, I buy from Amazon as opposed to any other site. Say I can get a widget from NewEgg, Amazon or BestBuy. I need to save 10% - 20% and not pay for shipping in order to buy from NewEgg or BB. Barring that, I'll buy from Amazon since I have sunk that investment for two-day delivery. Prime is like a gravitational field. I suspect the costs for digital media are a wash because not everyone takes advantage.
melgross
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melgross,
User Rank: Ninja
7/28/2014 | 2:08:58 PM
Re: Long term problems.
I know of a lot of people who have always bought a fair amount from Amazon, including myself. While it's possible that you might be buying more with Prime, that doesn't necessarily mean everyone does. Amazon has had to raise the price drastically over the years, and I'm far from being the only one who has stated that they take big losses from it.
Shane M. O'Neill
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Shane M. O'Neill,
User Rank: Author
7/28/2014 | 12:14:46 PM
No heat in this Fire
Microsoft and Amazon are trying to reinvent the smartphone UI with live tiles and carousals and 3D, respectively. Problem is, nobody was complaining about apps and widgets arranged on homescreens. I don't think the world wants a dramatically different smartphone UI and the Fire Phone will continue to struggle due to lack of apps. It doesn't help that the phone is clearly a ploy to use Amazon services, there is no deal on price, and only AT&T provides service.
Lorna Garey
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Lorna Garey,
User Rank: Author
7/28/2014 | 1:53:21 PM
Re: No heat in this Fire
And in other news, AWS apparently could be hosting DoS bots. So, yeah. Bad week.  
melgross
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melgross,
User Rank: Ninja
7/28/2014 | 2:06:24 PM
Re: No heat in this Fire
I completely agree. I've been saying the same thing. We all remember the rousing welcome that WebOS received. But, when I was in carrier stores, I would see people pick up the Pre, poke around for a few moments, and put it down. The problem was that it wasn't discoverable. If you didn't know how to use it, you wouldn't know how to use it, if you know what I mean. Win Phone is the same way, people pick it up, and put it down again. It's too different, and until the latest update, had too many defect to be worthwhile. Whether the newest update will change people's attitude is questionable. The Fire phone is the same thing. The biggest new features don't work well at all, and don't seem to serve any purpose. The concept of head tracking is one that doesn't seem to make any sense, because the results can be easily duplicated by sensors that are already in the phone, that allow tilt. The fact that Amazon is expecting a loss up to $810 million this current quarter shows that the intro of the phone will cost much more than they will make off it.
Charlie Babcock
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Charlie Babcock,
User Rank: Author
7/28/2014 | 3:41:50 PM
We're in the Middle Ages of smart phones
"Apple, Google, and Microsoft are seasoned veterans and masters at what they do." This is a brave statement. I would say Apple, Google and Microsoft are the wizened veterans, who sometimes seem to know what they're doing. Microsoft is huffing and puffing, trying to make a Windows phone fly. Google can't seem to enforce sufficient discipline over the Android suppliers to create a unified community. Apple seems to have its act together, as long as no powerful open source alternative appears. We're in the feudal, Middle Ages of smart phones, with, hopefullty, the Enlightenment still to occur.


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