Amazon Stock: 1 Feature The Fire Phone Needs to Drive Profits

Getting users to shop online is good. Getting a cut of any sale is better, and could help drive gains in Amazon stock.

Jun 23, 2014 at 3:39PM

The Fire Phone won't be a meaningful catalyst for (NASDAQ:AMZN) stock until it gets better at enabling commerce.

I'll understand if that sounds crazy. The onboard Firefly database allows users to point Fire Phone at one of more than 70 million household products in order to make it easier to buy at What could possibly be missing? One thing: mobile payments.

What Amazon really wants
For a glimpse at how this might look, I pulled this little-viewed YouTube video from Amazon's own payments team:

A payments platform could be an easy way for Amazon to grow its revenue base. Credit:

Notice that it isn't the user but the retailer that controls the payments infrastructure. If you're a small business and you want to offer customers the option of paying through Amazon, you can do so by including a button that activates a hosted checkout system. Neat, but not necessarily distinct when Square and PayPal already offer their own mobile payments systems.

Indeed, PayPal processed more than $27 billion in mobile transactions last year while growing overall revenue 20%. Square, meanwhile, has taken the extra step of using the data on its small-business customers to begin offering simplified loans. Competition is getting fiercer by the day.

The missing link
Contrast that with the consumer side of the market. Despite persistent rumors that Apple (NASDAQ:AAPL) would encourage its 800-plus million iTunes users to try a new payments system tied to the iPhone, we've yet to see consumers adopt any single "digital wallet" app on a mass scale. Firefly could be that app, and not just for the Fire Phone.

Think about it. You point your iOS or Android smartphone at an item you're interested in and the Firefly app gets more details or even comparison shops for you. Then, at checkout, you pay with your phone and Amazon account, giving the e-tailer a cut of the proceeds.

Of course, you couldn't do this without smart, wireless point-of-sale terminals. But that's also a temporary roadblock. Mobile point of sale systems comprise a roughly $2 billion market in North America right now. Users will do more with digital wallets as these systems become pervasive. The only question for investors is how much will Amazon participate.

The Fire Phone may already be too late
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!

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool recommends and Apple. The Motley Fool owns shares of and Apple. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information