How Amazon Is Trying To Create A Huge Mobile Business

July 2, 2013 Leave a comment

How Amazon Is Trying To Create A Huge Mobile Business

JOSH LUGER JUL. 1, 2013, 4:50 PM 5,796 1

U.S. mobile commerce is exploding. Amazon, as a leading ecommerce site, is set to grab a big chunk of that. But when it comes to mobile, Amazon’s ambitions are anything but limited to ecommerce.  Recent reports from BI Intelligence detail Amazon’s mobile ambitions, analyzing everything from the potential impact of a rumored Amazon smartphone to Amazon’s ability to become a huge player in mobile advertising.

Here’s a brief overview of Amazon’s mobile ambitions:  

Tablet Sales: Amazon’s Kindle tablets and Android tablets had a big third quarter last year. Kindle shipments, including e-readers, jumped 104% in the quarter, likely helped by the early September launch of the new Kindle Fire tablet line and the fact that the 7-inch version began shipping that month. It’s tablets priced very competitively. With the release of the Nexus and theiPad mini, the competition has never been hotter.  Software sales: The Amazon Appstore has been a huge success on the Kindle Fire. Developers make almost as much revenue per active user as they do on iOS. Google Play has many more users, but it does not generate substantially more revenue in the U.S. than the Amazon Appstore. Apple executives reportedly worry that Amazon’s controlled, iTunes-like approach makes it more competitive than other app stores, including one operated by Google. Given strong early results, Amazon shouldn’t have a hard time convincing developers to bring their apps to an Amazon phone.

Media sales: The Kindle Fire is best understood as an interactive catalog which drives sales of all sorts of Amazon products. The Kindle ecosystem includes ebooks (Kindle app), music (Amazon MP3), movies and TV shows (Amazon Prime), and apps. Almost 50 million Americans visited an Amazon site on their smartphones in July. Over 86 million U.S. smartphone owners accessed a retailers’ app or mobile site, meaning 47% went to an Amazon property. The next largest smartphone draw was eBay, which had 33 million visitors with a reach of 31%.

Smartphone Sales: Amazon continues to push forward with the makings of a smartphone platform. The potential platform has been widely rumored but not yet confirmed. The beginnings of a platform strategy are coming together: a recent purchase of 3D mapping startup UpNext, last year’s acquisition of voice recognition software creator Yap, and the launch of a prepaid wireless service in Japan. However, big questions remain about its ability to build out and manage a software platform and design the hardware to deliver it.

Mobile ads: Amazon has the potential to be a huge force in mobile advertising. Data is the lifeblood of online advertising and Amazon has a unique data trove. It’s not just data on what people like to buy, but data on what recommendations work in getting people to buy things. 

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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