Strategy question

Should Amazon launch a smartphone?

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What this question tests

Strategic judgment on whether to enter a mature, capital-intensive hardware category, weighing past failure and current advantage.

How to approach it

  1. Acknowledge history: Amazon previously tried and discontinued the Fire Phone, a relevant data point for this decision.
  2. Assess the current market: smartphones are a saturated, high-R&D-cost category dominated by Apple and Android OEMs with strong brand loyalty.
  3. Assess Amazon's actual advantage: retail, cloud infrastructure, and Alexa voice ecosystem, none of which strongly require owning a smartphone.
  4. Weigh the strategic case for entry: deeper first-party device control for commerce and Alexa integration versus the very high cost and past failure risk.
  5. Weigh the case against: better ROI likely exists in doubling down on Alexa-enabled devices and retail infrastructure than fighting for smartphone share.
  6. Recommend no, with a specific alternative: continue investing in Echo and Alexa ecosystem devices instead of re-entering smartphones.

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