Amazon – Wrong dimension.

Amazon is attacking the wrong end of the value chain.

• Amazon will hold an event in Seattle on 19^th June to launch what is very likely to be a smartphone based on its own proprietary version of Android.
• Amazon is absolutely on the money when it comes to needing to differentiate its device from the rest of Android but 3D is unlikely to be the way to do it. .
• If the chatter has it right, the device has been enabled with a glasses free 3D technology adding a whole new dimension to the user experience.
• Glasses-free 3D typically uses optical tricks to project a different picture to each eye giving the 3D effect required.
• However, this often results in a very narrow viewing angle which is unacceptable on a TV let alone a smartphone.
• In order to combat this problem many companies have tried to use cameras to track where the user is and to then adjust the images such that the 3D viewing angle moves to where the user is.
• The teaser video suggests an optical effect of some kind as users are seen moving their heads around and expressing amazement.
• The leader in developing this technology was Toshiba but it has recently given up developing the technology after failing to get it to work to a level that was considered acceptable.
• On top of the fact that this approach appears to be unworkable, this device has six big problems.
  • First: The 3D effect in a smartphone will require custom-made and very specific components. This will ensure that the cost of the phone is very high meaning that the price will either be very high or Amazon will lose a lot of money when selling the device.
  • Second: This kind of active tracking of the user and adjusting the picture will be processor intensive. This means that battery life will be worse than competing devices.
  • Third. This type of 3D effect halves the effective resolution of the display as two pictures need to be rendered at once. Hence the effective resolution of the screen will be half that of other devices at the same price.
  • Fourth: This optical effect requires optical filters to be placed on top of the display meaning that the device will probably be thicker and heavier than its competitors.
  • Fifth: Amazon Android does not meet Google’s specification for its application. There will be no Google Play on this device meaning that app. availability will be poor.
  • Sixth: Amazon’s ecosystem is not well developed enough, nor is it cheap enough to stand on its own against Google, Apple or Microsoft.
• The fact that this technology seems to be unworkable combined with the fact that Amazon’s ecosystem is too immature to stand alone is likely to ensure that the device is a disappointment.
• Amazon is right to differentiate its device, but it needs to do so in its ecosystem not in hardware gimmicks.
• Splitting its free shipping option in Amazon Prime off from its content and ecosystem offering would lower the cost of entry and would make the proposition much more attractive for those that don’t benefit from the free shipping option. (see here).
• It is this that I believe has been the major reason why its ecosystem take up has been poor and why Kindle Fire shipments have been very disappointing.
• This is where Amazon should be focusing as a 3D gimmick that looks almost certain not to work very well will only ensure that margins remain tiny for a longer period.
• Microsoft, Google and even Yahoo! seem to have a better idea what to do in the ecosystem than Amazon and until things change, there is only likely to be further disappointments.