Should Amazon enter the smartphone business?

Clarify - 

1. What does it mean by smartphone business - manufacture and sell/supply parts/provide a platform for selling/partner with some company? - Manufacture and sell smartphones

2. What’s the objective? Market growth/Revenue? - Market Growth

3. Where does Amazon want to enter? Any particular demography or region? - India

4. What user segment does it want to cater? - Nothing of that sort

5. Any other resource constraints or time constraints? - No constraints as such

Company - 

Amazon wants to be a platform to serve all the customer needs from A - Z. Be it mobile phones, electronics, grocery, etc. Amazon is currently selling everything and diversify its product portfolio as much as it can.

Customers and pain points - 

User segments - 

1. Tier 1 city customers - urban

2. Tier 2 city customers - urban

3. Tier 3 city customers - rural

4. Tier 4 city customers - rural

For the time being, I want to talk about the tier 3 & 4 customers. And to talk about them, 60% of the Indian population still belongs to the tier 3 & 4 cities. That’s somewhere around 600 Mn people. This is a user segment that’s highly underserved and has a lesser spending capacity because of their lower incomes

Pain Points when it comes to smartphones - 

1. Are wary that smartphones come with English language and are difficult to understand

2. Are skeptical about whether they really need a smartphone or not

3. Don’t have a lot of money to spend on purchasing smartphones

4. Don’t have a lot of money to spend on buying call/data packs

5. What is a smartphone?

6. How to use a smartphone?

Competitors - 

The smartphone industry is highly competitive. There is samsung, nokia, apple, oneplus, xiaomi, redmi, nothing, htc, etc. 

A lot of brands. But all of these brands are majorly catering to the tier 1 and tier 2 cities - phones with high price points - making them unaffordable for poor people.

Strategy to enter - 

1. Manufacture smartphone under 2-3k ₹.

2. Enter the tier 3 and tier 4 cities which is yet to penetrated.

3. Amazon basics smartphones - with regional languages pre-installed and region-specific default language. 

4. Partner with Jio - for data and calls for 1 year. Free calls for a year. Free daily 500 MBs data for upto a year. - Indian people are hungry for freemium products.

5. Showcase the importance of smartphones in today’s digital era - helps stay connected, stay entertained and stay up-to-date

6. Keep the smartphone with a very minimal number of apps - can promote Amazon ecosystem

Another strategy - 

1. Amazon basics smartphones for the farmers - why? Very big user segment

2. Offers for them - Teach them to be more farm productive by giving them free lessons from Youtube and free data in partnership with Jio

3. Rest services to be the same

Tradeoff analysis -