Tomorrow is the day of Amazon.com's (NASDAQ:AMZN) smartphone event. The rumored device is expected to feature an innovative 3-D interface that uses a new head-tracking sensor to create a stereoscopic view of the interface. The company could potentially use that to offer a unique shopping experience.
Chances are that Amazon's phone will be free on contract after carrier subsidies come into the equation. Amazon loves pricing very aggressively, but $0 is as low as it can go. That's one reason why Amazon may have a hard time competing in smartphones -- because the market is already very competitive. Amazon still lags Apple and Google in total apps, although it recently announced that it now has 240,000 apps and games available in its Appstore for Android.
AT&T (NYSE:T) will reportedly be the exclusive carrier of the device. That also makes sense, because AT&T has a Sponsored Data program that would allow Amazon to pay data fees related to its services, such as the freshly unveiled Prime Music. Amazon will likely use its phone as a way to sell Prime subscriptions.
In this segment of Tech Teardown, Erin Kennedy discusses Amazon's smartphone ambitions with Evan Niu, CFA.
Erin Kennedy owns shares of Apple. Evan Niu, CFA owns shares of Apple. Evan Niu, CFA has the following options: short January 2015 $280 puts on Amazon.com and long January 2015 $250 puts on Amazon.com. The Motley Fool recommends Amazon.com, Apple, Google (A shares), and Google (C shares). The Motley Fool owns shares of Amazon.com, Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.