By : Philip Shan
Source : http://www.examiner.com
Category : Patent Infringement
The same manufacturer of iPhones is teaming up with Amazon to make a new smartphone that would rival Apple’s phones, using the Android network. Still there are barriers to entry. Amazon may buy a portfolio of mobile patents to give them the capability to sell and license mobile phone use without running into patent infringement and litigation.
So far, InterDigital has pitched up $375 million for their patents, an offer that is being looked at by Amazon, according to Bloomberg. The demand for patents has gone up given the lawsuit frenzy arising from patent infringement. A new entrant in the monopoly of mobile phones could really shake up Apple, who is already being undercut by Amazon with their tablet devices.
Not only does Amazon want to profit on the sales of its phones, it has a considerable interest in expanding their digital media business, which is a good chunk of their total revenues. Bloomberg writes, “A smartphone would give Amazon a wider range of low-priced hardware devices that bolster its strategy of making money from digital books, songs and movies. It would help Chief Executive Officer Jeff Bezos made a foray into tablets with the Kindle Fire -- carve out a slice of the market for advanced wireless handsets.”According to the article, Samsung and Apple combined sold 398.4 million smartphones.
The cell phone business has entered a state of so-called ‘perfect monopoly’ where a few companies monopolize the market with third-parties able to provide the same generic service at a lower rate. The no-contract phones offer identical service just with a different company and customer service. If people are willing to pay full price for a phone they can get identical service for cheaper without a contract. Otherwise, customers only have to pay a fraction of the price for new phones as most phones are heavily discounted.
Since Amazon’s phone would work off of the Android operating system, it could be carried by more than one service carrier making its sales potential that much greater. Different versions of the Amazon phone may be supplied by different mobile phone service carriers.
Source: http://www.examiner.com/article/amazon-making-a-smartphone-to-rival-iphone
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