Amazon is looking beyond being a device-maker and online retailer — it wants to be the next major company to become involved in mobile broadband.
Amazon is reportedly testing a satellite-based wireless network that would give users of its electronic products, such as the Kindle Fire, direct access to the Internet without a third-party operator getting involved.
Amazon has simulated the network through spectrum owned by satellite communications firm Globalstar, Bloomberg reported. If Amazon jumped into the mobile broadband game, it would not only have control over its users' devices and apps, but it would also control the network. Globalstar claims that its spectrum can accommodate heavier traffic and provide faster speeds than on a traditional Wi-Fi network.
If it moves forward, Amazon needs to assure users that its network would be free of interference and be cheaper and more readily available than other alternatives (Wi-Fi, 4G networks, etc.), according to Yankee Group senior analyst Rich Karpinski.
"Much like Google with its fiber trials and balloon experimentations, it makes sense for Amazon to have its labs testing out all flavors of alternative broadband delivery approaches," Karpinski said.
Karpinski notes that this could make for a powerful business model. A Kindle with data included will ease the online transaction process. It might even be more beneficial for Amazon to subsidize delivery costs or even include it, along with an affordable annual fee, as part of an expansion to Amazon Prime. Success in the mobile broadband game would help Amazon appeal to a smartphone consumer base down the road and intensify the ongoing competition with Google, he added.