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Amazon Is Betting There'll Be a 3-D Smartphone In Your Future

NEW YORK ( TheStreet) -- Amazon (AMZN - Get Report) will be making a big announcement on Wednesday it its hometown of Seattle and if all the rumors are correct the retailer will be expanding its line-up of electronics with a smartphone (or two) that could be sporting a 3-D screen.

Amazon won't disclose exactly what it's introducing this week but it has dropped a number of hints including sending attendees copies of CEO Jeff Bezos' favorite childhood book " Mr. Pine's Purple House" (Hint: The purple house is different from all the others) as well as a teaser video with potential customers' reactions to something new and different. Watch them move their eyes, heads and hands; seems like they're watching a three-dimensional screen.

Amazon reportedly has been working on a 3-D phone for years, and in the past few weeks there have been a number of leaks and educated guesses on what could be Amazon's first smartphone.

In a nutshell, expect a near top-of-the-line smartphone from Amazon running on a highly stylized version of Google's (GOOG - Get Report) Android operating system. The guesses include a Qualcomm (QCOM) Snapdragon processor mated to 2 GB of RAM similar to what's inside the company's Fire TV device.

But the big difference with the smartphone is reportedly a 4.7-inch, 720p, 3-D screen. Pundits believe Amazon has finally perfected its vision of a 3-D smartphone screen by using a number of front-facing cameras and sensors to continually track the three-dimensional experience in relation to a user's eyes and make adjustments accordingly.

Amazon is hoping that 3-D plays a lot better on a handheld product than it did in the industry's recent flat-screen TV fiasco. Those TVs were a giant flop for three reasons: The 3-D experience was -- at best -- disappointing; 3-D programming was extremely limited; and -- the most important factor of all -- no one cared.

Putting 3-D effects in a handheld device might neutralize at least one of those problems. If the 3-D effect isn't perfect on the new phone, you can always move the phone, or your eyes, or your head to make it better. As for the other problems, Google has its work cut out for itself.

Amazon also is likely to introduce a bunch of 3-D games to play on the phone, and there might even be some 3-D movies to watch. But it will be interesting to see what else users can do with a device such as this that they can't do on any other smartphone. 3-D books? 3-D toasters? Will 3-D phones appeal to business and enterprise buyers?

There is also the problem of ever-increasing competition. In the past, Amazon has remained competitive with its e-reader and tablet offerings. But today's smartphone business is a very different animal. Just ask BlackBerry (BBRY)Nokia (NOK) and Mozilla/Firefox. At the moment, products from  Samsung and Apple (AAPL) lead the way with a smattering of Microsoft (MSFT) Windows Phones bringing up the rear. Other companies -- HTC, LG, Huawei and Lenovo, just to name just a few, are also vying for top honors. Amazon will have to immediately compete with all of them.

Amazon also will have to contend with the buying public. Most shoppers are used to walking into a cellular carrier's store (or an Apple store) to investigate a large range of devices before making a choice. Unless Amazon announces a marketing deal with one or more of the top U.S. carriers or brick-and-mortar retailers such as Best Buy (BBY) and Radio Shack (RSH), sales could be limited to Amazon's online store. That could place the new phone at a tactile as well as tactical disadvantage.

Expect the competition to react quickly. However cool the 3-D effect turns out to be, it could be old hat within days. Expect admiring manufactures around the world to knock off the device possibly before the Amazon phone ever reaches a customer. And whether or not 3-D turns out to be the next "big" thing for smartphones, the new device will soon have to compete with iPhone 6 models as well as this year's upgrade to Samsung's Galaxy Note phablet.

-- Written by Gary Krakow in New York.

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Gary Krakow is TheStreet's Senior Technology Correspondent.

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