Amazon’s Fire Phone: One Big Piece of a Real-World Shopping Push

What are the key features of Amazon's new Fire Phone?

Jun 19, 2014 at 8:30PM

Anyone who's fallen into a wormhole of product recommendations can testify that buying things on Amazon.com (NASDAQ:AMZN) is already pretty easy. With an Internet connection and a bank card, just about anything you can dream up is available around the clock, ready to be shipped to your door.

But some things haven't changed all that much since Amazon's dot-com debut as "Earth's Biggest Bookstore." Nearly 20 years later, the fundamental model is the same: point a Web browser to Amazon.com, search for stuff, and click "buy."

The Seattle-based company is working to change that in the coming years. And the company's new smartphone, unveiled on Wednesday, fits well with Amazon's broader push into the significant amount of shopping that doesn't happen on Amazon.com. Here's how the various parts of that strategy stack up:

The Fire Phone
Amazon's desire to build its own smartphone has been one of the worst-kept secrets in the mobile industry for a few years now. Still, CEO Jeff Bezos's unveiling of the new Fire Phone this week marked a significant milestone for a company that has been steadily moving into the consumer electronics field dominated by Apple, Samsung, and Google.

Amazon's core business as a retailer of both physical goods and electronic media means that the Fire Phone is immediately seen as a kind of supercharged shopping cart, and that's no mistake.

One of the phone's most notable features is something Amazon calls "Firefly," an application that can see images of real-world objects and return more information or a chance to purchase them online. Firefly also can identify sounds playing in the background and connect them to media, like songs or movies, which could be purchased digitally.

Bezos has downplayed the notion that the Fire Phone is mostly a glorified e-commerce device. But shopping is a key part of the device's plan.

"We know internally that people are using their phones more and more for mobile shopping, but it's not the biggest piece," he told The Seattle Times. "It's an important activity. It's certainly in the top 10; it might be in the top five. But it's not the top one."

Amazon Apps
The Firefly feature is definitely pretty cool-looking, and potentially gives Amazon a window into what people are looking at and wanting to buy when they're on the move. But this is not the first time Amazon has trotted out this technology: it's the core of an existing iPhone app called "Flow," and is built into the main Amazon shopping app as well.

Flow works pretty well in my tests—it can easily identify common consumer items, and even gets the quantities of particular bulk packages right. For things that it can't guess at based on the image, the bar code is a trusty fallback.

Amazon has been pushing general bar-code scanning apps for some time, to the consternation of brick-and-mortar retailers worried about "showrooming" by price-conscious shoppers. A couple of years ago, Amazon caused a stir by offering users a short-term 5 percent discount when they used its "price check" app to comparison shop in-store items.

Other devices
Amazon also has tested out an odd little device called Dash, a kind of wand-shaped thing that scans bar codes and takes dictation through a microphone, using speech-recognition technology to search for grocery items.

It's not a very widespread device yet. Amazon still offers it "by invitation only" on its website, and it has to be connected to a existing account for Amazon Fresh, the company's grocery and dry-goods delivery business that is only available in three areas of the country.

But the Dash concept is both a way for Amazon to collect data about shoppers and place an early bet on devices that might be used by people who aren't smartphone-savvy.

Retail and mobile money
This one's still pretty secretive, but the outlines are pretty clear. Like several other tech giants, Amazon is hoping to get a piece of the market for the billions of dollars in sales that are happening offline.

Well-reported stories in the press have outed Amazon's ambitions in this arena, from the possibility of electronic checkout systems to payments processingand person-to-person money transfers.

The company's job ads make it pretty plain. Amazon's Local Commerce team, with groups in San Francisco and Seattle, has been hiring steadily for the past year or so. The group describes its mission as "extending Amazon's value proposition (price, selection, and convenience) from e-commerce to commerce in general. We are building products and services which will delight billions of customers as they buy and sell things in the real world (as opposed to online)."

With all of the attention to growth in e-commerce, and the increasing number of cool things you can do with an Internet-connected supercomputer in your purse, it's easy to forget that more than 90 percent of U.S. retail still takes place offline. Amazon hasn't lost sight of that fact, and it's set its sights on competing for a bigger slice in just about any way it can.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

This article originally appeared on Xconomy, along with:

Curt Woodward has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Amazon.com, Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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