"Amazon won't pin its business strategy’s success on its own branded hardware products," says Harry Wang, director of mobile research at Parks Associates, a technology research and consulting firm. "But owning its own hardware serves several strategic advantages: It enhances branding visibility, retains more loyal customers, better integrates Amazon services and shopping apps with hardware, and gains some leverage with digital content providers, merchants and partners. Overall, Amazon is trying to use hardware to improve consumer perception of the Amazon experience in order to drive revenue growth."

Wang adds that he doesn't expect an Amazon smartphone to gain significant market share, nor does he think Amazon itself would be banking on major smartphone market share, at least in the near term.

"The smartphone market is already highly competitive in developed markets," Wang says. "Amazon can price its smartphone at a very affordable price in order to attract replacement buyers. But otherwise, it will be a tough battle for the e-commerce giant."

From the article, "Game of phones: Will Amazon.com join the smartphone battle?" by Bill Siwicki.

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