WASHINGTON — Amazon, the world’s biggest online retailer, is set to announce details of its new smartphone in a much-anticipated event Wednesday in Seattle.
After years of speculation, and a growing number of hints, one detail remains unclear.
“That’s the big question: Why does Amazon need a phone?” says Rafe Needleman, editorial director of Yahoo Tech.
Amazon has provided few details, other than to announce the launch event will be hosted by Jeff Bezos, chief executive of Amazon.
The release of a preview video seemed to back up rumors the phone would include 3D features.
“I’m not expecting fully-immersive 3D,” says Needleman.
“Based on the hints that Amazon has given, what we expect is there will be eye-tracking cameras in the phone that make the device look like you’re looking into a deep window.
“So, as you move your eyes and head around, the image shifts as if you are looking into it,” Needleman says.
The people in the teaser video show users reacting to the phone, holding it around waist level.
“If it requires any form of locking your eyes into a certain orientation, it simply will not work,” predicts Needleman.
Why Amazon wants you to have their smartphone
Needleman says the phone would likely interact with Amazon’s Fire TV, Kindle tablets and Kindle e-book readers.
“Amazon is trying to become the default place you go to get your stuff, whether it’s physical goods or media, from books, to video, to music,” says Needleman.
“Having the premier device that everyone has with them all the time, as both a communications device and a store and showroom, could be very big for Amazon.”
It’s not clear what the Amazon phone would cost.
“I have no idea whether they’ll be giving the phones away or selling it for $500, or where in between they’re going to fall,” says Needleman.
The standard structure is to charge a small amount for the phone up front, and then pay for it over time through carrier bills.
“Amazon could do something like that. They could give a big discount to Prime users and try to lock people into their Prime subscriptions.”
Leaked images of the phone suggest it appears similar in size and thickness to an iPhone.
One thing about which Needleman is clear: Amazon won’t follow Apple’s strategy of pricing devices at the upper end of the personal electronics spectrum.
“They’re all about getting you into the Amazon ecosystem, so Amazon doesn’t want to overprice their phones and lock you out of the ecosystem,” he says.
“Amazon isn’t designed to make money from hardware, the way Apple is.”
Apple and Amazon are at the top of Fortune’s list of Most Admired Companies.
“Jeff Bezos is a big fan of the Costco model, where you sign up to be in a retail club, and then they serve you better,” says Needleman. “They give you freebies and free shipping — all to make it easier for you to buy stuff from them, and the price is competitive.”
Despite Amazon’s history of revolutionizing online behavior, Needleman isn’t certain the Amazon smartphone will be as groundbreaking.
“We’re not sure the consumer will be interested in having such a commercial product as their main communications device. For me, that is the biggest question.”
Watch Amazon’s teaser video for Wednesday’s event:
