Amazon smartphone: The emerging market challenge

19/06/2014

Amazon has been teasing a new product for weeks, and today Amazon is holding a launch event to show off the fruit of their labours. Through leaks and Amazon’s own teasers the device looks to be a smartphone running a forked version of Android that re-introduces 3D to the arena and likely brings Amazon’s services to the fore of the user experience. While these are interesting developments, will Amazon gain any market share from the hardware giants Apple and Samsung? Is it the right move for Amazon to target the West where it already has success?

New research from Upstream and Ovum reveals that the global e-commerce company really needs to do groundwork in the emerging markets if it wants to be a global success. Amazon is currently lagging behind its ‘Big 3’ key competitors Apple, Google and Microsoft in these regions, where smartphone usage is growing at an incredible rate – making its performance in these markets a significant point of discussion.

KEY FINDINGS FROM THE NEXT MOBILE FRONTIER REPORT

• Amazon is only recognised by around half of consumers (56%). Samsung is most recognised brand in emerging markets followed by Google (87%), Apple (85%) and Microsoft (82%).

• Only 21% of emerging market consumers want to or currently spend money with Amazon.

• Over half (52%) of emerging market consumers said that Apple is the brand that they currently spend money on or would like to spend more money on in the future. Microsoft (48%) and Google (43%) were not far behind.

Marco Veremis, CEO of Upstream and former senior advertising strategist for Grey, McCann-Ericsson and DDB. said: “Amazon is set to enter the smartphone battleground on June 18th as it unveils a new 3D device. The move will give Western consumers another handset to consider in the very-crowded smartphone marketplace, and while the 3D functionality may appeal to Western consumers because of its innovation, will Amazon achieve the cut-through it needs to make the product a global success?

“While the device may not compete with the hardware giants of Apple and Samsung, it may serve its own purpose of promoting Amazon’s online marketplace through better imagery to Western consumers. However, in India, Nigeria, Brazil, Vietnam and China, only 21% of consumers currently spend or want to spend money with Amazon (Upstream’s The Next Mobile Frontier Report). Therefore, rather than creating products to reinforce an already successful marketplace in the West, Amazon needs to look to emerging markets if it wants to become a leading online marketplace worldwide. This is perhaps a more strategic priority to grow in the regions where Amazon is falling behind opposed to continuing to stick to areas of strength.”

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