Amazon's iPhone Competitor Delayed Until 2014
Amazon (NASDAQ: AMZN) might be ready to take on the iPad Air, but it seems that the company will wait until 2014 to release any additional products.
According to AppleInsider, Amazon has teamed up with a "number of Asian compact camera module makers" to supply advanced sensors for a new phone. Those sensors could provide Amazon with the technology to develop a handset with 3D gesture and eye-tracking input.
This suggests that Amazon's first phone will be a high-end, high-priced handset that is designed to compete directly with Apple's (NASDAQ: AAPL) iPhone.
It was previously assumed that Amazon would develop a less expensive phone that would undercut the iPhone 5S, which currently retails for $649 and up. The iPhone 5C, Apple's so-called lower-cost smartphone, starts at $549.
When Amazon released its first tablet, the company chose to focus on the smaller, seven-inch format. This allowed the firm to heavily undercut Apple's prices. Instead of selling a device at $499 (as most of Apple's competitors did -- including those who developed seven-inch devices), Amazon was able to sell its first tablet for $199.
Now the company offers a broader range of tablets, including the Kindle Fire HDX 8.9", which retails for $379.
Critics often complain that Apple charges too much for its handsets. However, the company has maintained the same tiered pricing structure for several years -- even as new processors and special features (such as Siri or Touch ID) are added.
Amazon is rumored to be working with HTC (OTC: HTCKF) to develop its first smartphone. This could help the online retailer reduce some of its expenses. But if new technology is employed, consumers should not expect Amazon to charge a low price.
Since the smartphone industry is famous for its subsidies (in the United States, at least), Amazon could offer a discount to those who sign up for two years of Amazon Prime. The company has not offered this deal to tablet buyers -- likely because those devices tend to be cheaper. But if Amazon is willing to knock $50 or $100 off the MSRP in exchange for a Prime contract, the phone's price could be much more attractive.
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Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ
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