Amazon Opens Online Mobile Phone Store

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Amazon is moving into yet another retailing realm. This time, it’s mobile phones.
Amazon on Thursday rolled out AmazonWireless.com, a beta Web site that offers cell phones, service plans, comparison shopping features, easy rebate redemption, and free two-day shipping on AT&T and Verizon Wireless phones.

Sprint and T-Mobile are noticeably missing from the short roster of carriers. However, Amazon said it plans to add carriers and expand its selection during the beta phase, as well as test features and gather input from customers to optimize the experience.

“We have taken our eight years’ experience selling cell phones to create a new site that makes a potentially confusing transaction much easier for customers,” said Paul Ryder, vice president of consumer electronics for Amazon.com.

Clearing Customer Confusion

Amazon may be tapping into a consumer pain point. A recent Best Buy Mobile survey reveals a large number of American adults are planning to buy a smartphone in the next 12 months, but barriers are standing in their way. Some of the barriers identified in the survey include confusion about the technology, the shopping experience, and price.

More than half of women and 42 percent of men are confused about which smartphone to buy, and more than half of adults over 50 express this confusion. Sixty-four percent of Americans say they don’t own a smartphone because the devices are too expensive.

Best Buy and AmazonWireless seem ready to go head-to-head to solve these issues. Scott Moore, vice president of marketing for Best Buy Mobile, said his company offers smartphones from nine major carriers, along with unbiased, noncommissioned pros to guide consumers to the devices, features and services that are right for them.

“We offer free upgrade checks to anyone currently using any form of mobile service so customers can see if they’re eligible to get a smartphone; and, in many cases, there are special promotional deals along with our everyday instant rebates,” Moore said. “We want everyone to have a smartphone.”

Amazon’s Advantage

Currently, AmazonWireless only offers about 120 phones, including smartphones and the latest models for budget-conscious shoppers. Customers can shop for phones by carrier, phone feature, price, color and brand. The site’s shopping cart guides customers through each stage of the purchase process, and customers will find Amazon features like bestseller lists, detailed product descriptions, and customer reviews.

“The step-by-step purchase process on AmazonWireless makes it easy for customers who already have a plan to upgrade their phones,” Ryder said. “If you want to establish new cell-phone service, we’ve made it simple to find the right phone, service plan, and options for your needs. We’ve also eliminated the technical jargon and frustrating rebate paperwork that customers often face when buying a phone.”

Best Buy doesn’t offer the same online wireless store that Amazon is rolling out, but Amazon isn’t the first retailer to offer phones and plans online. Amazon will, however, be the largest.

“Amazon is doing this because they commission when they sell a service plan. Don’t think this is going to give you any better choice of handsets or prices than you are going to get from going directly to AT&T or Verizon,” said Mike Disabato, a senior analyst at the Burton Group. “But it makes sense for Amazon to do this.”

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