Amazon could be HTC lifeline

Rethink
The times when Amazon goes quiet are when Google should fear it most, and as usual in the run-up to the holiday season, the online retailer has come up with a range of introductions to challenge the Android leader from within its own fortress – and may be about to debut its long-awaited smartphone.
 
Over the past couple of years, Amazon has been doing its best to establish itself as an Android heavyweight, competing with Google not just with its tablets and content platforms but to be the premier app store. A handset would certainly extend that reach, enabling the company to control the experience of its stores and content services on small screens as well as big.
 
Several reports claim that the company will finally unveil one or more handsets as part of a string of five new gadgets, some of which will be ready for this year's holiday season. Rather than working with anonymous white label manufacturers as it does for the Kindle eReaders and tablets, it is said to be pursuing a Google-like partnership approach for the phone, tying up with HTC.
 
The Taiwanese vendor has scored several hits lately in design terms, with its well-received One smartphone and now its eye-catching 5.9-inch HTC One Max, a phablet with fingerprint recognition. But there are doubts whether even these strong devices can make up for the decline in market share which the handset maker has suffered in recent years, and it may be pursuing some left-field options to restore its fortunes. So it would probably welcome the revenue and credibility boost of an Amazon contract, especially as it was pushed out of Google's Nexus inner circle by Samsung.
 
According to The Financial Times, HTC and Amazon are working together on a handset which could give the Taiwanese firm the shipments boost it badly needs. A white label or even co-branded device would detract from HTC's recent – and initially impactful – efforts to market its brand identity, but this would be balanced by the promise of volumes. Amazon has broad channels, massive consumer profile and a proven ability, with its Kindle eReaders and tablets, to shift devices at affordable prices in order to drive sales of its contents and other goods.
 
 
The FT report said one of three planned devices is at an “advanced stage of development”, which could even point to a launch in time for this year's holiday buying spree, though Amazon itself has denied such a plan for 2013. However, working with HTC could accelerate its efforts and enable it to prepare a handset rapidly if the conditions are right for a launch this year.
 
Other recent reports and leaks have said that the giant retailer was planning a portfolio of mobile devices, under the banner of the “Alphabet Project”, including a 3D smartphone designed to take on the Samsung Galaxy S4 at the high end, rather than staying in Amazon's low-cost heartland. The latest Kindle Fire tablets also saw Amazon adding more advanced technologies and chasing a higher end consumer group.
 
Amazon is not only working on hardware, but on continuing to enhance the competitive position of its Kindle Android platform against Google's own, and so drive purchases of devices and content. Its latest moves aim to foster developer loyalty and, most importantly, it is expanding in India, while the competitive lines there are still fluid, signalling the real battle that awaits for the Android and mobile commerce majors.
 
The retailer has announced a system to offer credit, in the form of its own Amazon Coins virtual currency, when users buy apps from its new Appstore Developer Select program. This program asks developers to build their apps specifically for the Kindle Fire in return for the retailer promoting their wares and featuring them in a special section of its store to increase their visibility to consumers.
 
 
Amazon's store has roughly 100,000 apps, compared to 375,000 for the iPad alone. Better discoverability can be as attractive to developers as higher fees - “We've heard from a lot of developers that are not getting discovered, not only in our app store but any app stores really,” the platform's director Aaron Rubenson said.
 
One of the failings of Amazon's early Kindle efforts was to expand too slowly outside the US, but it is making up for lost time now with rapid-fire launches in key markets such as India and China. It brought the AppStore to India in May and has now rolled out its mobile shopping app, ticking the vital box, for success in this market, of supporting local content and currency. This is a lesson that Nokia learned early, but which Apple, and to some extent Google, have largely ignored.
 
India is Amazon's tenth marketplace and supports the marketplace and international sales. The localized service comes hard on the heels of the launch of rival Flipkart's native Android app for India. This is where the real threat to US-centric Android services lies – in well-funded local players like Flipkart, dubbed “India's online megastore”, which has raised $360 million so far this year.
 
Google may, rightly, be worried by the Amazon Trojan Horse, which undoubtedly expands the Android universe, but in a way that steals the revenues and brand profile away from Google Play. But with mobile content growth shifting to emerging economies, it really needs to find a strategy to cope with the upcoming giants like China's Alibaba and India's Flipkart. Amazon is responding more nimbly so far, but its empire will be under siege too. All the vendors need to look well beyond their current parochial developer offers and marketing pushes, and get serious about the new markets.

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