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10/3/2013
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Amazon Working On Two Smartphones?

Amazon is said to be developing two smartphones. Can the company succeed in the fiercely competitive consumer smartphone market?

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Amazon is working on not just one, but two smartphones, reports TechCrunch. One will be a high-end device that includes a 3D-like user interface, while the second will be a mass-market device with a lower cost.

Details concerning the devices are somewhat thin, but TechCrunch's sources say the more expensive model will use four front-facing cameras to track user eye movement to create a UI that gives the impression of being 3-D. The cameras will reposition UI elements depending on the user's point of view. The device will not use an actual 3-D display panel -- that fad came and went several years ago with little success.

Another significant feature discussed is an image recognition tool that would let device owners take pictures of items that are then matched to things for sale on Amazon.com. The feature would not rely on barcode scanning, but on actual photographs of real-world objects. TechCrunch says this feature is still in development and may not make it to the release version of the phone.

[ How does Amazon's new Kindle Fire HDX compare against leading tablets? Read Kinde Fire HDX Vs. Tablet Rivals. ]

Information about the second device is even more scant. The device will be less expensive and less feature-rich than its more powerful companion, but will still be a fine piece of hardware on which to consume Amazon's digital content.

Both devices will likely run Amazon's FireOS, which is a heavily modified version of Android. Amazon already uses FireOS on its Kindle Fire line of tablets. With an operating system more or less already in place, developing smaller hardware to run it shouldn't prove too troublesome for Amazon.

Amazon may be running a successful tablet business at the moment, but smartphones are an entirely different animal, and its success in entering the market is anything but guaranteed. For starters, consumers use smartphones differently from tablets: smartphones require service contracts with cellular network operators. They are smaller and more portable than tablets and are more prone to loss, drops or theft. U.S. consumers have come to rely on subsidies offered by wireless network operators when upgrading to new hardware.

Amazon would have to offer its smartphones at a competitive price to spur consumer interest. It would also have to pair them with contracts that are appealing to cost-conscious buyers. Phones are less of a luxury purchase than tablets; most people in the U.S. have come to rely on phones as a necessary part of their daily lives.

It goes without saying that competition in the smartphone space is fierce. BlackBerry, an incumbent player, has spent the last couple of years imploding. Palm collapsed several years ago. Nokia's handset business is in the process of being purchased by Microsoft. And HTC is teetering on the brink of oblivion. How does Amazon think it can compete in a space that has devoured companies with decades of experience?

TechCrunch notes that both devices are still in the development phase and probably won't reach the market any time soon.

Earlier this year, Amazon refuted reports that it was developing a "free" smartphone.

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Byurcan
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Byurcan,
User Rank: Apprentice
10/4/2013 | 2:24:47 PM
re: Amazon Working On Two Smartphones?
Not sure how Amazon can differentiate itself in the glut and clutter of the smartphone market, even with a 3-d interface. And there are already plenty of existing options for a " mass-market device with a lower cost."
Thomas Claburn
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Thomas Claburn,
User Rank: Author
10/3/2013 | 11:21:52 PM
re: Amazon Working On Two Smartphones?
Amazon positioned its tablets as devices to promote consumption of content sold through Amazon. That proposition looks less compelling on a smaller screen with a monthly mobile fee.
Laurianne
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Laurianne,
User Rank: Author
10/3/2013 | 5:57:16 PM
re: Amazon Working On Two Smartphones?
Look at how patiently Amazon is building its cloud business -- though it continues to keep the whole revenue story a mystery. They could be just as patient with smartphones.
Lorna Garey
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Lorna Garey,
User Rank: Author
10/3/2013 | 4:48:17 PM
re: Amazon Working On Two Smartphones?
How well it can compete probably depends on how willing it s to subsidize the hardware, especially given the new trend of not bundling the cost of the device into the two-year contract. A move to more transparency in cost and uncoupling the phone from the service contract seems to provide an opening.
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