The reaction to Amazon’s recent phone announcement followed a pretty typical pattern: gee-whiz live-blogging in the morning and cynical analysis in the afternoon. But dissecting nifty hologram effects and price points is beside the point.
New product features have a retail half-life of 90 days and a media half-life of 90 minutes. In a few years these phones will come in the mail for free with an Amazon Prime membership.
The real lesson here is that Amazon has made a pragmatic decision to use the world’s most relevant consumer platform, the smartphone, to help cement one of the world’s most seamless brand relationships.
Apple, Google and Amazon have all been able to extend beyond their original core competencies (hardware, search, and e-commerce) to build direct relationships with their consumers. Relationships that are still faithful to their brands, but extend way beyond their initial value propositions.
Here’s a simple test: It’s highly likely that you have an Apple ID, a Google ID, and an Amazon ID.
This ID isn’t just data; it represents a relationship. Yes, the core of the brand still matters—design for Apple, knowledge for Google, convenience for Amazon—but while these companies take justifiable pride in their primary products, they also take pains to demonstrate that those products are just a means to an end. Ultimately these three companies are platforms.
Now, are you walking around with a Coke ID? A General Electric ID? A Toyota ID? A Disney ID? Probably not. Those brands don’t have a relationship with you. They don’t know who you are (you don’t buy Coke from Coke, after all).
After all, the idea of having a credit card-enabled ID connected to a fizzy sugar water company might sound strange. Or would it?
The key for these brands now lies in working out whether uprooting their business model to focus on the customer relationship is a sensible move. Coke sells soft drinks, GE and Toyota are ultimately hardware manufacturers, and Disney is (mostly) still a content company.
But there’s the possibility for those companies to follow in Amazon’s footsteps: Coke could also become a live sporting events platform; GE has a whole constellation of web-enabled products; cars are increasingly becoming multi-channel ‘data plans on wheels’, lending credence to a ‘Toyota ID’; and for Disney, facing challenges from digital distribution channels like Netflix, owning the customer relationship increasingly makes sense.
Ultimately, Amazon’s Fire phone isn’t about the gadgetry or the processors – it’s about the fact that it’s using a smartphone as yet another vehicle to make our Amazon IDs even more relevant to our daily lives.
That being said, I am looking forward to checking out the nifty new hologram phone for myself.
Tien Tzuo is chief executive of Zuora