Assuming Amazon Inc. (NASDAQ:AMZN) unveils its 3D smartphone on June 18, I could wind up being one of the device's first buyers. Does that make me a winner (or a loser) in the latest round of the smartphone wars? And who else stands to win (and lose), assuming Amazon CEO Jeff Bezos really is preparing to pull a new smartphone out of his hip pocket?
Potential Winner 1: Amazon (In A Big Way). I'm already a loyal Amazon Prime customer. My Apple Inc. (NASDAQ:AAPL) iPhone 4 contract is up. I'm due for a smartphone upgrade. And I'm on AT&T Inc.'s (NYSE:T) network -- which apparently will be the exclusive network for Amazon's phone. That makes me (and millions of customers like me) a prime target for Amazon's 3D phone.
Potential Winner 2: AT&T. We all remember the boost AT&T got when it was the early, exclusive network for Apple's iPhone. Amazon won't give AT&T that huge of a boost, but a new recurring revenue stream for AT&T would be welcome news for the telecom giant.
Potential Loser 1: Amazon. What if Amazon's 3D interface doesn't work so well? Consider these two scenarios:
- Scenario 1: We've all seen complex video games that "look" beautiful, but the actual game play is horrible.
- Scenario 2: In stark contrast, simple games like Candy Crush and Minecraft depend on great design without great graphics.
If Amazon's 3D interface fits scenario 1, Bezos could be dumping inventory fast.
Potential Loser 2: Microsoft Corp. (NASDAQ:MSFT). Sure, Apple could face some pressure from Amazon's smartphone. But I think the bigger potential loser is Microsoft. Windows smartphones have struggled to become relevant in a world dominated by iOS and Android software, and Apple and Samsung (OTC:SSNLF) hardware.
If Amazon somehow muscles its way into this market, Microsoft's smartphone business could land in the discount rack -- indefinitely.
Potential Loser 3: Best Buy Co. Inc. (NYSE:BBY). The struggling retail giant often complains about two challenges:
- First, Best Buy wants Silicon Valley to invent new, fresh gadgets that the retailer can sell in its stores. Without innovative products on retail shelves, Best Buy's foot traffic falls.
- Second, Best Buy worries about so-called "showrooming" -- when customers visit retail stores but ultimately spend their money elsewhere, online.
Amazon's new smartphone could further complicate Best Buy's challenges. What if the 3D phone becomes the innovative device Best Buy craved -- but can't sell? Even worse, what if Amazon's phone somehow takes "showrooming" to the next level?
I'm cautiously optimistic Amazon is about to disrupt the smartphone market. But I'm also one of those geeks who wasted $1,500 on Google Glass. This time around, I will wait and read a few dozen product reviews before opening my wallet. Unless, of course, the cool factor during Amazon's June 18 launch event is just too much to ignore...
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Within the technology market, the author is long on RHT and RAX, and he also owns mutual funds that invest in tech stocks.