Instead, I believe that Amazon is actually targeting its e-commerce rival, eBay Inc (NASDAQ:EBAY), with this device. The Kindle Fire was never about toppling the iPad. It was about strengthening its ties to consumers by creating an operating system that convinced users to purchase more digital goods (apps, e-books, videos) from its online store and physical ones from its main site, which is cleverly wrapped into the operating system itself. People who mock the Kindle Fire because it doesn’t measure up to an iPad misunderstand its key function – as a mobile shopping tablet designed to funnel revenue back to Amazon.com, Inc. (NASDAQ:AMZN).
A 3D shopping experience
Now consider what Amazon could do with its e-commerce site on a 3D smartphone. It’s not about displaying power-hungry 3D videos or playing 3D games. It’s all about a 3D shopping experience. Online shopping has become an increasingly visual affair, and eBay Inc (NASDAQ:EBAY) has already adopted a Pinterest-style main page to capitalize on this change. While some vendors on eBay and Amazon offer views of a product from multiple angles and with close-ups, it’s still often hard to tell what the actual product looks like.
Many sites, such as GSMArena, already offer 360-degree views of various gadgets. Now imagine if Amazon allowed sellers to upload 3D images, taken with Amazon’s phones, of their wares to the mobile site, so buyers could view and possibly interact with the “holographic” products. I believe that being able to interact with 3D images of the products would increase sales substantially, and give Amazon a huge edge over eBay Inc (NASDAQ:EBAY), whose mobile site would look archaic by comparison. If Amazon combines that mini-3D shopping mall with a voice-activated assistant, it could have a cutting edge, niche device that sets it apart from common smartphones from Apple and Google Inc (NASDAQ:GOOG).
If this is Bezos’ plan, then I believe that an Amazon.com, Inc. (NASDAQ:AMZN) smartphone could be sold at a paper thin margin or at a loss, in order to drive sales of its physical products – just as the Kindle Fire was used to generate sales of e-books, apps and videos.
The Foolish Bottom Line
In conclusion, investors should never underestimate Amazon. Amazon already has a TV set–top box in the works to challenge Netflix, Inc. (NASDAQ:NFLX), so a smartphone could be arriving reasonably soon.
I believe that when Amazon’s phone arrives, it won’t be the challenger to Apple and Google that everyone expects it to be. Instead, I believe that Amazon intends to turn smartphones into 3D mobile shopping devices that add three new dimensions to the world of e-commerce. These smartphones could be a lot smarter than you think.
The article Amazon’s Smartphone Could Be Smarter Than You Think originally appeared on Fool.com and is written by Leo Sun.
Leo Sun owns shares of Apple. The Motley Fool recommends Amazon.com, Apple, and eBay. The Motley Fool owns shares of Amazon.com, Apple, and eBay. Leo is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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