It sounds like Amazon is thinking about developing a range of three smartphones with handset manufacturer HTC in the face of increased competition from both Apple and Google.
Even though speculation about Amazon entering the smartphone market have been circulating for the last couple of years, it’s easy to see why this kind of relationship may be edging ever-closer to reality.
After all, a number of physical retailers have woken up to the value of tie-ups with complementary businesses: look at what Tesco has done with Giraffe and Harris + Hoole, and Morrisons with Kiddicare.
Deals like these have helped these high street giants to penetrate new markets that will appeal to their traditional customer base, without the risks (and costs) involved with building a new infrastructure and brand from the ground up.
Plus, well thought-out partnerships like these help to keep consumers interested, and in the case of a possible Amazon/HTC deal, ‘hooked-in’ to the companies in question.
For example, Amazon would probably jump at the chance to increase the amount of the consumer wallet that it controls by pre-loading all of these new phones with Amazon’s mobile app. M-commerce may still be the new kid on the block, but as mobile technology continues to develop and gain in popularity, this channel will become vitally important for all retailers.
So the potential benefits for Amazon are clear, but HTC has much to gain as well. In addition to being a well-known brand in its own right, HTC is also well-placed to develop the next generation of innovative mobile payment systems.
Anything that makes it easier for consumers to shop from their phones will accelerate these new buying habits even further, which is good news for both companies.
Whilst Amazon could use its new range of smartphones to dominate the m-commerce market and boost its revenues, HTC could develop new payment platforms that would allow it to control the countless mobile transactions being made with the world’s largest online retailer. Given this scenario, it’s easy to see how powerful the right partnership can be for a retail business.
Now, before we get too excited, we need to remember that this wouldn’t be the first time that HTC has tried to boost its profile and sales by partnering with a well-known internet brand; it brought out the HTC First, the so-called “Facebook Phone”, earlier this year. However, some valuable lessons have hopefully been learnt since then, following reports of the phone’s relatively cheap hardware and over-the-top embedding of Facebook software in its operating system.
After all, even though this joint venture could offer some important benefits for Amazon it would be even more important for HTC, which reported its first-ever quarterly loss earlier this month. In the face of serious competition from both Samsung and Apple, it’s easy to see why HTC would want to leverage Amazon’s global supremacy, as this could add some serious power to this potential partnership.
- Dan Coen, director, Zolfo Cooper