An Amazon.com package sits on a UPS truck on Oct. 8, 2010, in Palo Alto, Calif.

AP file photo

An Amazon.com package sits on a UPS truck on Oct. 8, 2010, in Palo Alto, Calif.

Amazon poised to enter smartphone market

By MAE ANDERSON and RYAN NAKASHIMA

Associated Press

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NEW YORK — Amazon, a company of seemingly boundless ambition, appears to be venturing into yet another market: smartphones.

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 Wednesday in Seattle, and media reports indicate the product will be an Amazon phone — perhaps one with multiple cameras that can produce 3-D photos.

Amazon declined to comment, but analysts said the goal is almost certainly a device designed to get customers to buy more things from Amazon. It 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 the research firm International Data Corp.

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 percent in 2014 to about $326, in part because investors have been losing patience with its habit of plowing revenue back into new ventures.

Analysts said the move into smartphones is a bit of a head-scratcher, since the company is 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 No. 1 and 2 mobile phone companies in the world.

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

Some analysts have speculated that the 3-D feature might tie into an Amazon shopping app. Shoppers might be able to use the phone to take a 3-D 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 R.W. Baird analyst Colin Sebastian.

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

Competing on price won’t help if it leaves people with the impression that the device is cheaply built, and getting customers to buy a phone without being about 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,” Llamas said.