) has decided to team up with phone maker HTC to develop
smartphones. It is believed that Amazon would develop a low-cost
smartphone as well as a costly device, aimed at different
sections of consumers.
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Since Amazon makes its own hardware for its Kindle e-readers and
tablets, it could have done the same for its smartphone too. But
Amazon's collaboration makes sense, given the fact that selling a
smartphone is slightly trickier than selling a tablet. It usually
requires a global distribution network and carrier partnerships
to be successful. While Amazon has a very successful online
store, it lacks this distribution network and this is where HTC
could fill the gap.
HTC was one of the leading Android phone makers in the world at
one time but is now dwarfed by Samsung. Its attempt to partner
with Facebook to launch a smartphone was a dismal failure. Given
Amazon's brand name, its popular market place, Prime
subscriptions and previous success with tablets this partnership
with Amazon should be more of a success.
Amazon has already developed an operating system for the Kindle
Fire, which could be used on smartphones. Also, unlike Facebook,
Amazon is into the business of selling stuff and therefore can
sell its smartphones on its own website.
Amazon has gone on to become a veritable consumer electronics
giant in addition to being an Internet retailer. The company
recently refreshed its Kindle Fire tablets, but other models are
expected in the next few months. But Amazon might not stop there.
If the rumors are to be believed, the company has many more
devices in the works, including a smartphone, an audio streaming
device, and an
) TV competitor.
Amazon's hardware competes with both Apple's and
), although competition with Google is fiercer, since Amazon has
adopted Google's Android operating system, but not Google Play.
Further, Google is entering its core market with product search
ads and Google Shopping.
Currently, Amazon has a Zacks Rank #3 (Hold).
) with a Zacks Rank # 2 (Buy) is a more attractive investment