Apple Stock News: Should Amazon Phone Rumors Scare Apple and the Mighty iPhone?

Amazon has recently released a teaser trailer for their upcoming event on June 18th in Seattle. It has been confirmed by reputable sources that Bezos intends to lead his company into previously uncharted territory: smartphone hardware. The trailer, shown below, features people reacting to something which they find really cool. The actors tilt their heads and clearly indicate that whatever they are holding is reacting to their movements. Most news sources are reporting that this is a 3D display and interface that could also track head and eye movements. However, to compete with Samsung and Apple, Amazon will need more than one distinguishing factor. Should Apple be nervous?


No one is sure yet what it will be called, but it has been reported that the phone will feature 4 front facing cameras for the head-tracking as well as a standard front-facing camera, a rear-facing 13MP camera, a 4.7-inch screen, a Qualcomm Snapdragon CPU, and 2GB of RAM. Techcrunch claims to have identified Okao Vision face-sensing system as one of the major technologies used with the new phone. Okao Vision, a Japanese company, has apparently worked alongside an internal Amazon team to enable the phone to track users’ faces. Furthermore, the screen is said to have realistic 3D effects without the need for special glasses. The technology can also determine the user’s gender and ethnicity.

In terms of hardware, the Amazon phone will not be as sexy as the iPhone. Samsung and HTC have been desperately trying for the past several years to catch up with Apple, but in terms of overall design, the iPhone is still king. On the other hand, it is also highly unlikely that the Amazon phone will be able to rival the Samsung Galaxy in specs such as battery life, camera quality, or processing power. So why will anyone buy the Amazon phone?

Analysts believe that the software, service, and price will be the major attractions for the Amazon phone. Amazon will produce this phone because of their data and service offerings such as Amazon Prime, not because they believe they can make a better phone. It is highly likely that Amazon will be able to sell the phone at a loss because they know the profits will come from added revenue on through e-book, music, movie, and other purchases. Others are speculating that Amazon will subsidize the data for the phone as they do with their e-reader and tablet. All things considered, the final product may be a phone with respectable yet unremarkable hardware with convenient access to the vast Amazon ecosystem, all at an extremely competitive price.

However, it isn’t clear that Amazon can make up for the small profit or even losses it would incur from subsidizing data service or hardware. I don’t believe the Amazon phone will make anyone more likely to purchase physical goods on Smartphones can already visit the website and make purchases easily while enjoying the benefits of an Amazon Prime account. Some speculators think that those who own the phone will enjoy discounts on various Amazon services and goods, but the deals would have to be extremely attractive to make up for the huge costs of manufacturing hardware. If the Amazon marketplace will be built into the OS of the phone, Amazon could just as easily have created an app or independent Android OS skin for other Samsung or HTC manufactured phones. Furthermore, other smartphones can download the kindle application and access all of Amazons e-books, so hardware for that purpose seems like an unnecessary added expense.

As for the reported 3D and head tracking capabilities, I’m not impressed. Unless the technology is hugely different from existing 3D screens, the interface will most likely drain battery life and cause headaches or discomfort for many users. It also isn’t really necessary. Most of the time I spend on my smartphone is to text, email, check Facebook, or read the news, and 3D viewing would add very little to the overall experience. I also believe the head-tracking will most likely turn out to be a gimmick used to attract attention. This feature will make any user look like a complete lunatic. The only thing more bizarre than repeatedly shaking your head at your smartphone might be to talk to a robot named Siri.

For now, I’m not convinced, but I expect that we may not yet know as much about this Amazon phone as we think. Whatever details are revealed, June 18th is likely to be a historic day in the smartphone world with another tech titan entering the ring.

-Jeremy Quartner

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