Amazon introduces Fire smartphone

Amazon today joined the smartphone wars, with the Amazon Fire, a device designed to let you talk on the phone, take great photos and sell you more products. It touts a viewing experience unlike that of other smartphones.

At a press conference in Seattle, Amazon unveiled the Fire, which falls into line with analysts predictions--it has four front-facing cameras for facial tracking, a 3-D like "Dynamic Perspective," view that can change as you move it, and will be sold exclusively by Amazon and AT&T, beginning July 25th.

The phone starts at $199 with a two-year contract with AT&T, or you can buy the phone without service from Amazon for $649. Amazon is throwing in one year free of its Prime offering to new customers--two-day free shipping and access to streaming music, movies and TV shows.

The big feature innovation, which analysts hadn't predicted, is "Firefly," a new tab that can recognize "over 100 million" items from the Fire cameras and microphone, everything from QR codes and web URLs, to the names of books, DVDs and household products, to the names of songs and titles of TV shows, like the Shazam app.

It's being sold as a way to point the phone at anything, and either learn more about it--or buy it on the spot. At the press conference, Amazon said it would work with popular calorie counting and tracking app MyFitnessPal. Use Firefly with the app to point at food, and Fire will tell you the nutritional value of the selection.

On Amazon's website, the company says Firefly can identify phone numbers, web and e-mail addresses--point the camera at them, and the phone will remember them as new contacts. It can hear a song, recognize it, get you artist information and transition to an app like iHeartRadio, which will create a radio station based on the artist on the spot.

James McQuivey, an analyst with Forrester Research, likes the new features, but doesn't think they go far enough to wean consumers away from the 2 best selling phones of the moment, the iPhone and Samsung's Galaxy line.

He thinks the Firefly feature is the most compelling, "but I don't know that consumers will care."

Who will care are physical retailers, who will be "terrified" of the feature, he says.

Showrooming--where consumers compare prices on their phones at retail locations, then go home and buy it on Amazon, "was already a problem. Now, they point the point at a product, and don't even have to get the barcode. Retailers will hate this."

The phone is Amazon's latest foray into hardware, following its successful line of Kindle e-readers and media players.

Fire has a 4.7 inch LCD screen, with a 2.2 GHZ processor, 2 GM of RAM, a 13 megapixel rear facing camera and four front-facing cameras.

The four cameras (as opposed to just one on most smartphones) will give shutterbugs the ability to capture images in lower light, Amazon said. The cameras can track your face and those of your friends.

Additionally, Bezos said users of the phone would get unlimited photo storage on Amazon's Cloud Drive. (It currently offers 5 GB for free.)

He sold the phone as a vehicle to read books from the Kindle library, and watch movies, via Amazon's Prime offering.

With Fire, Amazon will join industry giants Apple, Samsung, Google, Blackberry, HTC and Nokia in the smartphone race, which is dominated by Samsung and Apple.

Robert Peck, an analyst with SunTrust, believes a hit phone for Amazon could make a huge impact on the bottom line, to the tune of $2 billion. Peck estimates sales of 2.7 million phones, mostly to Amazon's Prime customers. "We assume that each new customer buys 10 items per year," from the phone, Peck says, at $50 each.


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