Is Amazon's Fire Phone Doomed Even Before It Launches?

The Amazon Fire Phone launches tomorrow, after spending years in development. Can the device's differentiated features really sell the smartphone?

Jul 23, 2014 at 7:00PM

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Fire Phone. Source: Amazon.

This Fool has no shortage of doubts about Amazon.com's (NASDAQ:AMZN) Fire Phone, which was finally unveiled last month. The device officially launches Thursday. Is it already doomed?

As usual, reviews are now starting to hit the Internet from various tech outlets that were granted units ahead of time. They're not good.

A gloomy consensus
There are precisely two key selling features for Fire Phone: Dynamic Perspective and Firefly. Furthermore, Amazon is asking potential buyers to forgo established platforms in favor of its nascent smartphone platform. Amazon's fork of Google (NASDAQ:GOOG)(NASDAQ:GOOGL) Android is inferior in all the important ways when it comes to what people look for in a smartphone.

Amazon's only advantage is that it makes shopping on Amazon a breeze, which probably isn't high on a smartphone buyer's priority list. Google's basic apps of Gmail, Google Maps, and Chrome make short work of Amazon's alternatives.

The consensus is that Dynamic Perspective is merely a gimmick.

  • The New York Times: "While technically impressive, [Dynamic Perspective] rarely makes for a substantive improvement in how you'll use your phone."
  • Re/code: "It's a neat trick, but, in my tests, I found that I tired of it, partly because you have to flick the phone just right to make the panels appear, and then again to dismiss them.
  • The Verge: "Dynamic Perspective makes for awesomely fun lock screens with much more to them than first meets the eye, but it does nothing to meaningfully improve the smartphone experience."

Amazon CEO Jeff Bezos reportedly became obsessed with Dynamic Perspective, which lengthened Fire Phone's development by "years." That's an awfully long time in the context of the fast-paced smartphone market, and the Fire Phone will suffer for waiting.

Firefly vs. Flow
On top of that, Firefly isn't entirely exclusive to the Fire Phone. Shortly after launch, I wondered if Amazon would bring the feature to rival platforms, which would simultaneously reduce Fire Phone's appeal but likely grow the core e-commerce business. It turns out that Amazon has had a similar app available on rival platforms for quite some time, called Flow. The app is made by A9 Innovations, which is an Amazon subsidiary that focuses on developing search technology.

Flow Ios

Flow for iOS (left) and Amazon iOS app with Flow (right). Source: App Store and screenshot from Amazon app.

Flow functions and looks identical to Firefly and was released on Apple (NASDAQ:AAPL) iOS back in 2011. An Android version was subsequently released in 2012. Earlier this year, before Fire Phone's unveiling, Amazon even integrated Flow directly into its flagship Amazon iOS app. That means that iPhone users can already get one of the best features of Fire Phone.

Firefly isn't quite the differentiating feature as it was billed as.

Developers, developers, developers
Both Dynamic Perspective and Firefly do have incredible potential, and the underlying technology powering them is quite impressive. However, Amazon will depend heavily on getting third-party developer support to really drive innovation and make use of the features.

That will prove to be extremely difficult, since this feature is unique to the platform. It's not like the Android apps that can be easily ported to Amazon's platform. Developers are already focused on iOS and Android given the combined global scale. Amazon is launching Fire Phone as an AT&T exclusive for some strange reason, combined with a surprisingly high price point.

That means Amazon will be on one carrier in one market, competing directly with flagship iPhones and Androids. In the U.S. market, Apple already has 42% market share of all smartphone subscribers, according to the latest comScore figures. Amazon hopes to convert a chunk of those fiercely loyal iPhone users to Fire Phone, but one of its headline features has already been on the iPhone for years.

Lacking developer support and only offering one true differentiating feature that's little more than a novelty, the Fire Phone is doomed.

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!

Evan Niu, CFA owns shares of Apple. 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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