Amazon's Fire Phone Is About Survival, Not Burning Apple
NEW YORK (TheStreet) -- Wall Street's worst-kept secret for the past two years was finally announced Wednesday when Amazon
Now we watch for whether the Fire will be a success along the lines of Apple's
There are similarities -- both companies turned to AT&T
The debate has been over whether the Fire Phone can burn Apple. Will Apple's stock lag until it is made clear iPhone sales will not decelerate. Those are all the wrong questions to be asking.
Fire Phone is no direct threat to Apple. Nor will Fire Phone spark additional upside to Amazon stock in the near term. The bottom line is, they both can co-exist -- but only Apple stands to make money on the hardware.
While there are a lot of similarities with Apple's original iPhone launch, including the fact that that Fire Phone will be made available only in the U.S., Amazon CEO Jeff Bezos has no interest in competing with or beating Apple. Apple's moat, or all of its combined competitive advantages, is already too large.
Rather, as with Fire TV and Kindle Fire and so on, Amazon is looking to duplicate Apple's advantages. Fire Phone is just another means of survival.
Consider the other announcement Wednesday on BlackBerry
While the deal is helpful to BlackBerry, it's also an embarrassment that BlackBerry, which had all of the first-mover advantages in the smartphone space, does not have a viable ecosystem of its own. This is what Bezos is trying to avoid.
The problem is, Bezos' never-ending ecosystem/infrastructure buildout will continue to cost Amazon plenty of money while causing many sleepless nights for its shareholders. To that end, whether Fire Phone sells well won't matter.