Monday, September 10, 2012

Apple's Main Threat

Is not Google.  It is not Microsoft.  It is Amazon.  If Dan Frommer's speculation about the Kindle Phone comes to fruition I think Amazon will claim a sizeable share of the smartphone market.  Frommer thinks that Amazon might do what it is now doing with the Kindle Fire 4G LTE which "buying wholesale data capacity directly from AT&T (as it's doing here, and as it does for the 3G Kindle), and charging a lot less for an entry-level smartphone plan than its competition."  The Kindle Fire 4G LTE data plan is $50 annually for 250 MB a month of data.  That is not a lot of data, especially for a tablet.  I use between half a gig and a gig each month.  But you can imagine a phone which has LTE that is $299 and instead of paying a combined $50-100 a month for minutes, texts, and data you pay $10 a month for data and use apps for free texting and google voice or skype for calls.  The software won't be as nice as iOS and the hardware won't be anywhere near as pretty or substantial but over the life of the contract savings could be between $1k-2k.  That will be enough to get a lot of people to think about changing and would be disruptive to Apple, not ruinous, but disruptive.

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