Amazon: Five predictions for 2013
Expect the company to expand its reach evermore. Amazon is not a company to rest on its laurels.
Amazon, the e-commerce juggernaut, will likely keep steamrolling every category it can possibly deem relevant to its business strategy. These are my top five predictions for next year.
1. Reaping what's sown
Amazon has been building up its services in the last few years: opening more fulfillment centers, adding hardware as a way to spread its content, and investing in production studios to release original content. Although the company had some disappointing earnings this year, it will start to see its investment in these projects return in 2013. It's a typical cycle for Amazon: spend lots of money on new services and products and then rake in the rewards.
2. Really stick it to Netflix
When it came to streaming movies and TV shows, Amazon and Netflix were in competition during all of 2012, with each adding more video to their arsenals and throwing little barbs. Now that Amazon has amassed a decent library of video, its next obstacle is getting customers to realize that its video-streaming service exists. The company will need to market itself more next year in order to convince Netflix customers to make the switch.
3. More fulfillment centers
Accepting the reality that an e-commerce company can't avoid state sales taxes forever, Amazon will push to open fulfillment centers in more states. Just because the company has already added new centers to various corners of the country, doesn't mean it's going to stop. More centers means Amazon spends less time and money to ship items. It has already committed to building new centers in California, Texas, and New Jersey next year. Maybe Maine and Florida are next?
4. Go South
The South American market is a huge opportunity for any consumer-focused company. Amazon, which has an established data-center in Brazil, is no exception. The company was knocking on Brazil's door all year and launched its Kindle store in Brazil in early December. Next year will likely bring a bigger push to expand into the South American market.
5. Amazon smartphone
The only thing missing -- that was actually expected to appear -- in Amazon's lineup of hardware this year was a smartphone. The prospect of an Amazon smartphone had the rumor mill buzzing temporarily. Amazon CEO Jeff Bezos made it clear that he's selling hardware to get Amazon content into people's hands. That's the model Amazon has followed for its tablets -- instead of selling them for a profit, the company sells hardware to deliver content. With mobile traffic becoming more dominant among consumers, a smartphone would be an important vessel for Amazon.