According to a report appearing in the Wall Street Journal (WSJ) this afternoon, Amazon will, in fact, be releasing a smartphone in the second half of the year. This development had been rumored for a some time.
The WSJ says that Amazon hopes to distinguish the phone with a 3D display that doesn’t require glasses. However, that by itself is unlikely to differentiate the phone sufficiently to ensure success.
It’s probably the case that an Amazon smartphone will be like a smaller version of Kindle Fire: a device that would use the Amazon app store, with its roughly 200,000 Android-based apps, and try to leverage Amazon content assets, as well.
In order to succeed in an incredibly competitive Android market, the device would also need to be priced very aggressively. For a time, the rumor was that Amazon would offer the phone for free. Amazon later killed that rumor.
Amazon could differentiate with hardware design or other “fashion” elements (e.g., personalization, colors). But it would need to produce a solid Android handset as a basic matter. There are many reasons why an Amazon smartphone (vs. a tablet) might fall flat — among them Samsung, Google/Nexus and Motorola.
However, if Amazon did offer a full-featured smartphone for $100 (unlocked) it would get lots of notice and have a fighting chance.