Amazon’s Supply Chain Will Deliver a Smartphone Within 3-6 Months

Amazon’s new smartphone could 'hang up' Apple and Samsung - Jeff Bezos may pull a Steve Jobs and disrupt the already established smartphone market on June 18. 

June 05, 2014

Amazon notified reporters and customers on its website and via a YouTube video (above) about an event during which it will launch of a “new device” at its Seattle headquarters on June 18. Quickly, speculation began that the company will launch its long-awaited smartphone. KGI Securities analyst Ming-Chi Kuo, who is most noted for accurately forecasting Apple product launches, wrote the following in a note to clients, according to BGR:

“We predict Amazon (US) will launch its own brand smartphone in 3-6 months, using the same hardware strategy as used for its e-reader and tablet. The supply chain will start stocking up materials in Q2 2014 for production.”

Kuo also reiterated rumors that have been circulating for months, saying that Amazon’s phone could feature six cameras. Like most smartphones, the device will supposedly use a main camera for taking photos and a front-facing camera for video chatting and snapping selfies. Amazon’s handset, however, may also come with four extra cameras to enable gesture control.

So this will be no ordinary smartphone device. In the last two months, reports have surfaced that Amazon is adding 3-D elements to its smartphone. The YouTube video Amazon posted (above) may hint in that direction.

Image Source: BGR

As reported by Adam Satariano via Bloomberg, Amazon tweeted yesterday that it was holding an event in Seattle on June 18 hosted by Chief Executive Officer Jeff Bezos for a product unveiling. The post included a picture of a black, thin device with Amazon’s name in silver emblazoned on it. Mary Osako, a spokeswoman for Amazon, didn’t return a call for comment.

A smartphone from Amazon would ramp up its rivalry with Apple, which makes the iPhone. The companies are increasingly going head-to-head in devices such as tablets and in Web services including online entertainment, as they strive to be digital gateways to consumers. Mobile is central to that effort as more people carry gadgets and do their computing on the go.

Greg Bensinger of the Wall Street Journal reported, Some elements of Amazon’s hardware push have previously become public. Last year, news surfaced about Amazon developing one smartphone. And last month, The Wall Street Journal and other media outlets reported that Amazon also was developing a set-top box for streaming movies and TV shows.

But the people familiar with the plans said the smartphone and set-top box are just two elements of a broader foray into hardware that also includes the audiostreaming device and the high-end smartphone with the 3-D screen. Inside Amazon’s Lab126 facility in Cupertino, Calif., where each of the devices have been under development, the efforts are known as Project A, B, C and D, or collectively the Alphabet Projects, said the people familiar with the plans.

Though Amazon has goals of releasing some of these devices in the coming months, these people cautioned that some or all of the devices could be shelved because of performance, financial or other concerns.

In recent years, Amazon has jumped deeper into hardware manufacturing to broaden its ubiquity and compete more directly with Apple and its tremendously popular iPad. The array of planned devices is part of a strategy to widen Amazon’s influence beyond its core e-commerce website and broadly into content distribution.

Smartphone Comparison

Source: The Wall Street Journal

Amazon would be entering a crowded hardware market, however. In smartphones, Appleand Samsung Electronics Co. together commanded 61% of the U.S. market in the first quarter, leaving other manufacturers such as HTC Corp. with less than 10% share each, according to comScore Inc. Once-dominant device-makers like Research In Motion Ltd. and Nokia Corp. have also failed to keep pace with smartphone innovations and watched their market shares tumble.

Three-dimensional technology has been attempted in phones, unsuccessfully, when the resolution on smaller screens was much lower. But with higher-resolution screens increasingly inexpensive, this could be the time 3-D takes off in devices. So far in movie theaters and TV, 3-D is considered a gimmick or annoying because of the need for 3-D glasses. The technology Bezos and Co. are reportedly working on does away with that requirement.

Amazon’s goal is to keep its customers buying more products at its doors. Colin Sebastianof Robert W. Baird wrote that Amazon wants to keep “the Apple Fox” out of the “Amazon hen house.” He added: “In order to control the funnel to commerce and content, Amazon needs to maintain a direct link to consumers.”

Bezos must be betting that all devices lead to his massive store, even if he has to give them away. That is probably the business model the company will pursue with smartphones too. We will find out on June 18.