Amazon 'set to launch smartphone'

Online giant Amazon is said to be venturing into yet another market - smartphones.

Amazon is widely expected to launch a smartphone
Amazon is widely expected to launch a smartphone

The corporate juggernaut that started out with books and soon moved into music, video, cloud computing and Kindle e-readers is hosting a launch event in Seattle, Washington, today, and reports indicate the product will be an Amazon phone - perhaps one with multiple cameras that can produce 3D photos.

Amazon declined to comment, but analysts said the goal was almost certainly a device designed to get customers to buy more things from Amazon and might include an Amazon shopping app or other features tied in tightly to the products the company sells.

"It's Amazon. That says to me the core value proposition is going to be about shopping," said Ramon Llamas of research firm International Data Corporation.

Amazon's phone comes at a time when the nation's largest e-commerce company is at a crossroads.

Its stock, which surged for years despite narrow profits, has dropped 18% in 2014 to about 326 dollars (£192.80), in part because investors have been losing patience with its habit of ploughing revenue back into new ventures.

Analysts said the move into smartphones was a bit of a head-scratcher, since the company was a late entrant into the highly competitive market.

For all its success with other products, Amazon will be hard-pressed to compete with Samsung and Apple, the number one and two mobile phone companies in the world.

Globally, Samsung led mobile phone manufacturers with 31% of the 288 million units shipped in the first quarter, followed by Apple at 15%. In the US, Apple dominates with more than 37% of the 34 million units shipped, with Samsung close to 29%.

Some analysts have speculated that the 3D feature might tie into an Amazon shopping app. Shoppers might be able to use the phone to take a 3D picture of a product in a store, then search for the object on Amazon and buy it online.

Analysts said the phone could also come with a data plan that could let owners use Amazon services without using up any data.

"Anything that generates more repeat orders and more frequent purchases is probably part of what they intend to do with this," said RW Baird analyst Colin Sebastian.

To compete, Amazon needs more than an expected 3D viewing feature, which has been tried before by smartphone makers like HTC and LG, Mr Llamas said.

Competing on price would not help if it left people with the impression that the device was cheaply built, and getting customers to buy a phone without being able to touch it first could prove difficult, he said.

"If they sell it only online, as Amazon sells many of its goods and products, that could be a challenge," Mr Llamas said.