There’s much ado about the rumored Amazon smartphone. With a June 18 debut expected, there’s now speculation over which carriers will feature the mobile device. AT&T will have an exclusive deal, according to the Wall Street Journal.
Citing “people familiar with the plans,” the Journal notes that arrangement extends Amazon's relationship with AT&T. The carrier also provides wireless service to Kindle tablets and e-readers. Much like the iPhone bolstered AT&T’s sales when it had the exclusive deal with Apple, some are predicting the Amazon device could be a boon for the United States’ second-largest carrier.
“Amazon hopes to distinguish its phone in a crowded market with a screen capable of displaying seemingly three-dimensional images without special glasses, these people said," the Journal reported back in April when it first broke the story. "They said the phone would employ retina-tracking technology embedded in four front-facing cameras, or sensors, to make some images appear to be 3-D, similar to a hologram."
Pressure to Perform
We caught up with Jeff Kagan, an independent telecom analyst, to get his take on AT&T’s rumored Amazon smartphone coup. He told us AT&T is the innovation leader in the wireless carrier space -- first with the Apple iPhone and now reportedly first with the Amazon smartphone.
“This will give AT&T a marketing edge the same way it had the first three years with the iPhone,” Kagan said. “AT&T and Verizon may be top of the charts as leaders in the wireless space, but they are very different companies. AT&T is an innovator. Verizon always takes longer and plays it safe.”
As Kagan sees it, the eyes of the technology world are on the new Amazon smartphone brand and the device should continue to generate buzz for a while. But that doesn’t take the pressure off AT&T to perform.
“The next big question is will this Amazon.com smartphone be a success like the iPhone or a failure like the Facebook phone,” Kagan said. “We'll just have to wait and see.”
Room for Amazon?
Amazon could not immediately be reached for comment, but if the various leaks prove true it would mean the e-commerce company is entering the smartphone fray at a time when market research firm IDC predicts the sales growth rate in the sector will sharply decline. Despite the high growth expected in many emerging markets, 2014 will mark the year smartphone growth drops more significantly than ever before, with only a 19.3 percent year-over-year growth, according to the firm's Worldwide Quarterly Mobile Phone Tracker.
"2014 will be an enormous transition year for the smartphone market," said Ryan Reith, program director with IDC's Worldwide Quarterly Mobile Phone Tracker. "Not only will growth decline more than ever before, but the driving forces behind smartphone adoption are changing. New markets for growth bring different rules to play by and 'premium' will not be a major factor in the regions driving overall market growth."
What’s more, comScore reports that Apple and Samsung are the clear leaders in the smartphone market. With a whopping 60 percent of the market share between then, it doesn’t leave much room for existing players, much less new entrants. Nokia and BlackBerry have both struggled in the wake of the success of Apple and Samsung.