After flopping with the Fire Phone, it seems Amazon is looking to dip its toe back into the mobile pool. According to a report from The Information, Amazon is hoping to partner with smartphone OEMs to deeply integrate its services into handsets. The report claims that Amazon "has discussed working with phone brands at a 'factory level' to integrate its services with devices in a deeper way than simply preloading apps."
"In essence, the retailer would like its partners’ phones to resemble Amazon’s line of Kindle Fire tablets that it builds on its own," the report states. The phones would be full of Amazon services and encourage people to become a member of Amazon Prime.
Amazon already dove into the phone market once with the Amazon Fire Phone, which the company released in July 2014 for $199 with a two-year contract, or $650 unlocked. Six weeks later, Amazon slashed about $200 off of both options and the price kept falling. The Fire Phone cratered at $130 for the unlocked version in August 2015, and it was pulled from the market shortly after. The Fire Phone flop resulted in a bunch of people getting fired from Amazon's hardware development center, and the company took a $170 million write down on the experiment in its 2014 Q3 financial report. The company's new plan sounds a lot like the Fire Phone, but Amazon would be letting someone else handle the hardware this time.
Amazon already pushes some of its apps on Samsung and AT&T phones, but the report says that Amazon hopes for "deeper integration" that would let it "gain a bigger backdoor to Google’s Android." The report doesn't explain what the "deeper integration" might be.
The Kindle line is a fork of Android, so Amazon maintains a ton of APIs for Android that compete with Google services. Amazon has Android solutions for an app store, in-app purchases, mobile ads, cloud messages, a map API, authentication, and tons of other features typically provided by the Google Play Store and Google Play Services. We think Amazon will have a hard time getting vendors to include these services instead of Google's versions. Last we heard, OEMs that wanted to license Google Play needed to sign a MADA (Mobile Device Distribution Agreement) contract with Google. The contents of these contracts aren't public, but a version from 2011 was revealed in the Oracle v. Google case. The 2011 version bundled most of the major Google apps together as a single package, saying "Devices may only be distributed if all Google Applications (excluding any Optional Google Applications) ...are pre-installed on the Device." It also had an anti-fragmentation clause, which forbid companies from taking any action that could "cause or result in the fragmentation of Android, including but not limited to the distribution by Company of a software development kit (SDK) derived from Android or derived from Android Compatible Devices." This is widely interpreted as blocking companies under contract for Google Play from building Android devices that don't ship with Google Play.
The contract also says OEMs "shall-not assist or encourage any third party to distribute a software development kit (SDK) derived from Android, or derived from Android Compatible Devices," which seems to suggest even assisting Amazon in building something like a Kindle device would be against the contract.
Amazon could produce some other features that don't replace core Google services and ask for those to be integrated. The Fire Phone had "Firefly," which was an object scanner app that could identify music, TV shows, actors, art, books, and tons of other things and funnel you to a related Amazon purchase. In our review, Andrew Cunningham called Firefly "hands-down the Fire Phone's best feature." Would customers view this as a welcome addition to their phones or just more bloatware for the pile?
We've already seen both Amazon (and soon Cyanogen and Microsoft) try to take the "Google" out of Android, but it's a tough fight when Google writes the operating system, third-party apps reply on Google APIs, and Google has nearly all of the hardware manufacturers under contract to not make forked Android devices.