Amazon's smartphone play could be about removing friction from retail experience

Amazon's (NASDAQ:AMZN) is poised to introduce its first smartphone at an event on June 18, according to various reports, but a big question hanging over the launch is: why? A report in the New York Times speculates that the real reason the retailing giant wants to get into the smartphone business is to remove friction from the retail experience, or to "close any remaining gap between the impulse to buy and the completed act." Indeed, the report notes that Sam Hall, an Amazon mobile executive, laid out Amazon's agenda a few years ago: "We're trying to remove the barrier between 'I want that' and 'I have it.'" Amazon could be trying to avoid getting marginalized by its tech competitors, but the phone market is a brutal one, especially for new entrants. However, the report notes that Amazon has several advantages. The company can sell a phone to its 250 million customers without a middleman; its app store is growing and now counts 240,000 apps and games; it can bundle features with its Amazon Prime membership club; and Wall Street has been forgiving of the company's slim profit margins as long as it is gaining market share. Article

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