There is one obvious reason Amazon will have to get back into phones

There is one obvious reason Amazon will have to get back into phones

bezos fire phone

Jason Redmond / REUTERS

Amazon's first attempt at mobile didn't go well.

  • Amazon CEO Jeff Bezos said during the firm's Q2 earnings that Alexa should be available to customers "wherever they are."
  • In an analyst note to investors, Macquarie speculated that this could mean Amazon will re-enter the phone market.
  • Amazon, unusually, flubbed its first attempt at mobile, the Fire Phone.
  • But it can't make Alexa ubiquitous unless the assistant natively integrated into mobile devices.

Amazon is strangely absent from the phone market. The company launched the Fire Phone back in 2014, which was generally considered a failure. Amazon gave up after it didn't sell well, and took a $170 million loss on unsold units.

It was a curious miss for Amazon, which usually dominates or massively disrupts every industry it turns its hand to: retail, cloud computing, and film and TV content, to name just a few.

But according to an investor note sent by Macquarie to clients on Friday, it's time for Amazon to give phones another shot for one important reason: Alexa.

Macquarie highlighted a brief statement given by Amazon CEO Jeff Bezos during earnings: "We want customers to be able to use Alexa wherever they are."


The bank concluded: "We suspect, though this is admittedly speculation, that [Amazon] will have to re-enter the phone market either directly or indirectly in order to drive Alexa adoption... It is hard to see
how they don't do this given the view that Alexa could be a new pillar."

Amazon arguably got into mobile too late the first time round, trying to make a dent in a market already sewn up by Apple's iOS and Google's Android. But in spite of that absence from mobile, Amazon has also found itself in a strong position in voice. Apple's Siri and the Google Assistant lead thanks to their ubiquitous presence on phones. But Alexa is third, solely because Amazon's smart Echo speakers are so popular.

market share voice assistants

Shayanne Gal/Business Insider

If it's going to maintain its position, or even overtake its rivals, it'll have to be on the device that everyone carries on them all the time.

As Macquarie concluded: "We don't see how Alexa can evolve to its fullest potential without being available prominently on the main device that so many people carry everywhere, the smartphone."


Macquarie suggested that Amazon could either make its own phones, or partner up with manufacturers.

As it stands, Alexa isn't the primary voice assistant on any phone. Siri is native to the iPhone, while Android phones either feature the Google Assistant or smart assistants created by device makers, such as Samsung's Bixby. Like any other assistant, Alexa gets better the more users interact with it. When it's limited to smart speakers, it's blind to what users are up to day to day.