Rumors of Amazon's intentions to launch a smartphone have been making the rounds for long. Speculations revived regarding the release of Amazon.com Inc. 's ( AMZN ) 3D smartphone, when the giant online retailer announced an event to be held on June 18 in Seattle to be hosted by chief executive officer ("CEO") Jeff Bezos for a product launch.
Amazon made the announcement through a 50-second video broadcast on YouTube showcasing people's reaction while trying out the device outside the frame. However, Amazon did not provide further details. This naturally prompted rumors that the e-commerce company is set to launch a high-end 3-D smartphone, which would intensify its competition with Apple ( AAPL ) and Google ( GOOGL ).
A smartphone is actually quite a good idea for Amazon since it would expand its current lineup of devices and further help sales of digital books, music and movies.
Per Wall Street Journal (WSJ) reports in April, Amazon officials demonstrated the sample handset models to developers from San Francisco and Seattle. Apparently, the phone will be available in both high-end and low-end versions, the high-end version offering a screen, which will present 3-D images without the support of special 3-D glasses.
Moreover, the devices will be integrated with retina-tracking technology, which will be embedded in four front facing cameras, enabling users to view 3D images with naked eyes.
Although Amazon has been successfully entering different markets, it might have to struggle to establish itself in an already crammed smartphone market. Per IDC reports, the smartphone market grew 21% last year. Apple and Samsung Electronics Co. dominate the industry and together constituted 46.6% of the total market in 2013, as reported by the research firm Gartner. Amazon's late entry could make growth difficult.
However, Amazon can have an edge over its competitors, given its special glasses-free 3D image viewing feature and retina-sensing display technology. Also, the device will provide a more compact software-hardware amalgamation, thus offering an improved user experience.
Amazon currently holds a Zacks Rank #3 (Hold). Gaiam Inc. ( GAIA ), which carries a Zacks Rank #2 (Buy), is a better-ranked stock from the same sector and is therefore also worth considering.
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