Could Amazon’s Smartphone Be a Contender?

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Source: Thinkstock

Source: Thinkstock

Amazon (NASDAQ:AMZN) is expected to launch a new smartphone any day now. The catch is that this new Amazon smartphone will be integrated into Amazon’s network and it will be only available on AT&T (NYSE:T).

The launch event is likely to take place in Amazon’s native Seattle. The Wall Street Journal reported the smartphone would be out in September, just in time for the new smartphone to pick up steam as the holiday season starts. That will give it an advantage in a highly competitive market.

Amazon’s new smartphone on its own Amazon platform faces a market dominated by the Apple and Android platforms. Smaller, but already established competitors include Windows and BlackBerry. Amazon has a small niche in the tablet market — about two percent of the world tablet market share — thanks to the Kindle and Kindle Fire tablets, but smartphones are uncharted territory for the company. So it’s taking a leaf out of Apple’s book to get started.

Like the original iPhone, the new Amazon smartphone will be released exclusively on the AT&T Wireless carrier. If it follows in the iPhone’s footsteps, it would be years before it is extended to another carrier. (The iPhone eventually made it to Verizon three years later.) The two companies already have a relationship. This latest move extends it by adding an exclusivity angle that could help draw customers, a move that also benefits AT&T in its battle for the number one spot against rival wireless carrier Verizon. The two are currently tied for the top American wireless provider spot. Having another exclusive phone may be enough to knock Verizon into second place.

Amazon has yet to officially announce that the device it is premiering this month is a smartphone, but a series of leaks revealed to BGR that Amazon is working on a smartphone to be launched soon. The publication was also among the first to report that the new smartphone would be AT&T exclusive. Like the iPhone, it is likely getting announced at an event to draw as much attention to the product as possible.

If the Amazon smartphone is announced soon, it would have a nice niche. The Samsung Galaxy S5 has been out for a few months, and while iPhone 6 rumors persist, no official announcement has been made about an iPhone 6 launch. That gap between smartphone launches may give Amazon an advantage. While it is highly unlikely to wind up the size of Apple or Samsung so quick after its launch, an Amazon smartphone could be serious competition for smaller smartphone makers like Windows, Blackberry, or LG. A shiny new smartphone with 3D and other features put out by a well-known company has great potential to draw an audience.

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