Alibaba to Release Smartphone – Amazon May Be Considering Another Try

This week, Chinese smartphone maker Vivo and Alibaba’s Tmall Innovation Center (TMIC) announced they are teaming up to create a new smartphone slated for launch in the fourth quarter this year.

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The conceptualization of this co-designed device will rely heavily on market intelligence and consumer feedback collected and analyzed by TMIC.

This type of manufacturing model, coined as “New Manufacturing” by Alibaba founder Jack Ma in 2016, takes the opposite tack from more-traditional models, which give the consumers almost no say in what hits the store shelves.

By drawing on insights and trends from Tmall’s 500-million plus customer base, TMIC says it will help them have a higher chance of producing a winning product that’s accepted by the demographic they wish to target.

As part of the tie-up, both parties have set up an innovation lab dedicated to creating the next generation of Vivo phones.

“Our foremost intention is always to create products that our customers truly like and based on their needs. [Consumers] can essentially decide what kind of products they want. This is really meeting the needs of the end-users.”

Wang Yonggang, Vivo’s head of eCommerce division

Amazon Considering Second Try at Phone?

In their latest earnings call discussing Amazon and the future, CEO Jeff Bezos is quoted as saying “We want customers to be able to use Alexa wherever they are.”

READ MORE: Amazon Earnings Explode to Record Profit – Tops $2 Billion

This quote has some stock analysts believing that it is possible Amazon may give it a second go at smartphones after failing miserably in 2015 with the Fire Phone.

The Fire Phone was such a failure, it caused Amazon to take a rare $170 million write-down on inventory and cease production.

But as consumers continue to expand mobile shopping and are embracing voice shopping with Alexa powered devices, Amazon may need to reintroduce a smartphone to grow Alexa into a digital personal and shopping assistant.

Apple with Siri and Google with its Android Assistant are fully baked into the OS, making it difficult to provide the type of experiences with an Alexa app that consumers now expect.

But just like in China, Amazon has to penetrate a nearly saturated market.

And unlike with its Fire tablets that are built on value, a smartphone has to be one that provides the mid to high-end performance to be considered as a replacement by users of IOS and higher-end Android devices.

It will be interesting to follow if Alibaba can turn its new smartphone into a success and if Amazon does actually make a second attempt at the market.

Certainly, having a smartphone that integrates shopping by using voice, augmented reality, and other advanced technologies makes sense.

But with that comes the possible price of privacy concerns that consumer may be skeptical of a phone that in theory is able to track movements and indirectly shopping behavior.

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