Don't Laugh at Amazon's Smartphone - You're Going to Want It

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An office building occupied by Amazon.com in Sunnyvale, California.
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The next phase in Amazon's (AMZN) plan for world domination will be unveiled next week. The leading online retailer has scheduled a media event for June 18 in Seattle.

Reports surfaced in May that Amazon was set to introduce a smartphone with holographic features to deliver 3-D viewing, and that seems to be exactly what we're going to get come Wednesday. Amazon's video in anticipation of the media event finds people tilting their heads as they admire the device's display, lending credence to the chatter that the smartphone uses several cameras to track facial movements in order to project images with depth.

It's been more than a year since the market started talking about Amazon's inevitable foray into the smartphone market. It may be late to the party, but it's entry may also be disruptive -- and that's exactly what you need to do if you show up to a revolution with a tardy slip.

The Path of Disruption

Amazon.com follows a pretty familiar pattern when it introduces proprietary products. It rolls out its entry once the market has already been established, then stands out on price or features.

For example, at $399, the original Kindle may have been overpriced as an e-reader, but it quickly evolved into a low-cost market disruptor as it slashed prices and improved its platform. The Kindle wasn't the first electronic reader, but it became the industry standard as a result of aggressive price cuts and a strong digital storefront.

Kindle Fire came next, and Amazon certainly wasn't a visionary on the tablet front. This was Apple's (AAPL) domain, and other tech giants trying to take on the iPad failed initially by pricing their tablets too high. Amazon went for the jugular by rolling out its gadget at $199, less than half what Apple was commanding for its iPad at the time.

Fire TV is Amazon's most recent salvo. At $99, it's not the cheapest set-top media player out there. Roku, Apple TV, and even Google's (GOOG) Chromecast are at that price if not substantially lower. However, Amazon hopes to appeal to its more than 20 million Amazon Prime customers with a small device that makes it easier to stream the movies and TV shows that it makes available to subscribers. There's also a voice search feature that's more advanced than what rival products are offering.

This brings us to the device that Amazon will introduce on June 18. If it lives up to the early reports it will raise the bar as to what is actually possible with a smartphone.

Don't Drop the Ball or the Call

An Amazon smartphone isn't likely to command the kind of margins that Apple gets away with on its iconic iPhone. Amazon knows that there are bigger fish to fry with its tweaked Android operating system that dovetails perfectly into is app marketplace.

The next-generation display will take video and even games to the next level, and those are two categories where Amazon can really set itself apart. If Amazon is able to get a large enough installed base of users, developers will flock to make games and other applications for the device. Movie studios will also want to explore what's possible as a result of these rich displays.

Amazon's coming in with what seems to be new technology and it will probably come in at an aggressive price. In other words, Amazon is ready to make up for lost time by moving ambitiously on both fronts where it has excelled so far.

Amazon's not early, but it's not too late to have the last laugh in the mobile market.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple and Google (C shares). The Motley Fool owns shares of Amazon.com, Apple and Google (C shares).


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11 Comments

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lthrnck68

HA! Not me. Won't do business with Amazon as long as there is any alternative. Certainly not a smartphone. Feel no need for any mobile devices.

June 14 2014 at 8:28 PM Report abuse rate up rate down Reply
B.Gee

I have a friend who has a smartphone. a tablet, a laptop, and a desktop. I haven't talk to him in person for 3 years. He lives a block away.

June 14 2014 at 7:31 AM Report abuse +5 rate up rate down Reply
Stephen Robert Black

Don't be mad your phone is junk :)

June 13 2014 at 11:29 AM Report abuse -1 rate up rate down Reply
Drew

Looks like Amazons market, cheapskates, dont care if it made some advance. Per the comments below.

June 13 2014 at 6:58 AM Report abuse -1 rate up rate down Reply
Drew

Looks like Amazons market, cheapskates, dont care if it made some advance.

June 13 2014 at 6:57 AM Report abuse -1 rate up rate down Reply
jrexmarda

Mark your calendar. Take the day off work, you have to. Get in line at 1:00 AM. Ditch your old phone. Old stuff is not cool. Probably why people don't want to know you. Don't wait. Order one online just in case. Cover all your bases. Dream about the 19th when you can walk around with it in public. Get stopped for speeding on purpose so the cop will see it. Call everyone you know on it, just your mom and your supervisor at work, but your life will be so exciting. Just like being in love. You'll want to sing. You'll want to dance. You won't be able to sleep. You may be pathetic in every other way, but when you get it, you'll be at the top of human development. When you have your very own Amazon Smartphone.

June 12 2014 at 10:07 PM Report abuse +4 rate up rate down Reply
1 reply to jrexmarda's comment
drpmindmender

LOL! You and the guy who did the "All By Myself" video at Las Vegas airport should get together, and take your show on the road.

June 13 2014 at 2:33 PM Report abuse rate up rate down Reply
bdgrizcp

If it does nothing more than make uninterrupted phone calls and access the Amazon Cloud, I'm interested. Yes, I'm behind the times but I do not care. Currently I have an el cheapo pad hooked to the big system and music via the cloud is as good as the source material. Having it portable means I can retire my SanDisk player. See? I wasn't lying. Way behind the times. Still don't care.

There is nothing about technology that forces anyone to use ALL of it, unless you are making lots of money. If not, you're just wasting money. You get to choose, and don't let anyone tell you otherwise.

June 12 2014 at 8:01 PM Report abuse +4 rate up rate down Reply
eatzdzert1st

I don't understand the negative comments.
My "non-smart" feature phone is over 6 years old and still does what I need it to do... I'm too blind to play games on such a small screen anyway LOL, but someday I'm going to need a new phone and I will definitely take a look at what Amazon has to offer. Same goes for my "cheap-o" Kindle.
IMO their products have proven themselves to be worthy investments for when it's time to upgrade/replace.

June 12 2014 at 6:00 PM Report abuse rate up rate down Reply
Valerie

Oh, gee. A 3D display screen. Wow and double wow. (Not).

I have a flip phone which does exactly what I want it to do. Sends and receives phone calls. As long as it continues to work well, I will keep it and not fall for the hype to upgrade to every "new and improved" smart phone that appears on the market.

I've seen too many people, who have a home full of shiny new electronic gadgets and (usually) a pile of video games (at $50 a pop), plus the latest and greatest gaming system. They are also constantly broke and have very little (if any) money saved and/or invested.

It's not easy to go against the tide of our consumer society which constantly bombards us with advertising screaming: NEW AND IMPROVED --- BUY BUY BUY!!!!! But, it is definitely possible to learn to resist that. And your wallet will thank you for it.

June 12 2014 at 5:23 PM Report abuse +1 rate up rate down Reply
jpfmtka

Wrong! I have a $12.88 flip phone with a cheap, no contract, all you can talk and text plan. Going on a cruise next month with the savings.

June 12 2014 at 5:04 PM Report abuse +5 rate up rate down Reply
1 reply to jpfmtka's comment
bunceltd2

Wow! Would you please share. My husband and I are in our late 70's and sure could use such a phone instead of the expensive plan we now have. Lorraine

June 25 2014 at 8:56 PM Report abuse rate up rate down Reply