Amazon Prime Mobile Phone Service Might Just Work!

Last week, Bloomberg reported that Amazon is exploring entering the mobile phone service market. Apparently the sting of how the Fire Phone failure in 2014 has worn off, and it seems like Amazon has identified a better path into a likely more receptive market. The speculation is that Amazon would resell service from one of the existing national carriers, buying network capacity at wholesale and offering it to Amazon Prime members as a free benefit or at rates far below market prices.

First, the obvious: mobile phone service would be an extraordinary added benefit for Amazon Prime membership. Practically all Amazon Prime members have a mobile phone, so the appeal is even more universal than streaming video, and possibly more than “free” expedited shipping. And unlike seasonal shopping and binge-watching, mobile phone connectivity is a continuous need. 

There are at least two more reasons Amazon is well-positioned to earn market share in the mobile phone service market. Amazon already has a small but important share of US mobile phone sales. Today, more customers buy mobile phones online. After years of mobile carrier physical stores establishing the market, technological advances make it more realistic for consumers to set up their own mobile phones. Since the pandemic, about 40% of new mobile phones are purchased online, compared to 25% in prior years.