This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Why Amazon's Smartphone Is No Threat to Apple

Stocks in this article: AMZN AAPL GOOG BBRY VZ T

NEW YORK (TheStreet) -- As an unabashed Apple (AAPL) shareholder, I was asked to weigh in on rumors that retail giant Amazon (AMZN) is planning to unveil a smartphone. My only response was, "Why not?"

Nothing Amazon does or plan to do in the future should surprise anyone. What should be a surprise, however, is if that endeavor produces any profit.

This is no slight at Amazon. But CEO Jeff Bezos has an entirely separate mindset when it comes to the bottom line. And it is for this reason I don't expect Apple to care very much about a new perceived threat.

According to the Wall Street Journal, which cites an anonymous source, Amazon has already developed several designs of the phone. But these sorts of reports have been around for a couple of years. Amazon has never publicly refuted these claims.

What seems to have gotten Apple investors uncomfortable are notions that the phone will be able to display 3-D images without special 3-D glasses. But how much will that matter? Theres currently no practical purpose for a 3-D feature.

The Journal reports that the phone announcement will be made in July and the company will begin selling the device in September - the same expected timeframe for the release of Apples iPhone 6. There are critical details investors should consider before getting too far ahead of these reports. Amazon has not answered calls for questions.

First, if these rumors are true (this time), how much traction can Amazon achieve in a phone market that is already crowded? Not to mention, saturated and suffering from weak average selling prices.

Apple and Samsung (SSNLF) are currently the top two players in global sales. With Amazon's unconventional business methods, including taking a loss on each Kindle Fire tablet sold, how much can it gain from a smart phone?

Although the company's tablets are priced considerably lower than Apples iPads, Apple has always remained the dominant force. Will the phones be any different? How much will they costs?

In the past, there were rumors that Amazon would offer non-subsidized version phones starting at around $400. And if Amazon does offer subsidies, assuming the phones do enter Apples market, will their be enough margin to offset investors concerns about Amazons lack of profitability?

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs