Amazon debuts shopping-savvy Fire smartphone exclusive to AT&T

As expected, Amazon (NASDAQ:AMZN) debuted its long-awaited smartphone, dubbed Fire, that will be sold exclusively by AT&T Mobility (NYSE: T).

Click here for more details on the Amazon Fire.

One of the highlights of the retail-oriented device is a service called Firefly that identifies more than 100 million different items, including books, music and TV episodes, and lets users purchase them with the click of a button. The phone also sports an interface called Dynamic Perspective that is intended to make navigation easier; the UI also recognizes where a user's head is relative to the device and lets users tile the phone to scroll through information or get more details hidden in apps. The Fire also has a Second Screen app that lets you fling TV shows and movies from your Fire phone to your Fire TV, PlayStation or other Miracast-enabled device.    

The smartphone, which is available starting July 25, costs $199 for the 32 GB version with a two-year contract or $299 for the 64 GB version with a two-year contract. The phone is also available via AT&T's Next handset upgrade and installment payment program for $27.08 for 24 months. It also comes in a 64 GB version for $299.99 or via the Next installment program for $31.25 per month for 24 months or $37.50 for 20 months.

Interestingly, the Fire phone comes bundled for a limited time with 12 months of Amazon Prime service, which typically costs $99 annually. Prime includes free two-day shipping from Amazon, unlimited streaming of movies and TV shows with Prime Instant Video, unlimited, ad-free streaming and downloading of over 1 million songs and hundreds of playlists, and more. Amazon said existing Prime members will get an additional 12 months added to their account for free.

Amazon's Fire phone, which was long rumored to have 3D-like capability, uses multiple front-facing cameras and software to show 3D renderings of buildings, maps and more via the Dynamic Perspective UI. Amazon said it will make navigation quicker, especially if you are using just one hand. The company is making the Dynamic Perspective SDK available to developers to encourage the technology's use in games and other apps.

Firefly, the item recognition service, is perhaps the most interesting Fire feature. Firefly can identify real-world items like signs and business cards and zero in on relevant information to identify the items.

According to Amazon CEO Jeff Bezos, with the phone's dedicated Firefly button, users can click on an item, find out more information about the item and even purchase it. Like Dynamic Perception, Firefly can also be integrated into other apps. For example, with an app like MyFitnessPal, a user could click on a piece of food and immediately find out the nutrition value.    

The phone also sports Amazon's Mayday button, which delivers live video customer service on the phone from Amazon.

As far as other phone specifications, the Amazon Fire has a 13-megapixel camera with optical image stabilization, a 1080p HD video, a 2.2 GHz quad-core Qualcomm (NASDAQ:QCOM) Snapdragon processor and 2 GB of RAM.  It also has a 4.7 inch HD screen, dual-stereo speakers and Dolby digital audio.

The phone also comes with free unlimited cloud storage of photos taken with Fire and automatic wireless back-up capability.

Although this is Amazon's first smartphone, it isn't the first time AT&T has teamed exclusively with a company to offer a phone only to AT&T customers. The company in 2007 started that tradition with Apple's (NASDAQ: AAPL) iPhone, which resulted in a lot of customers flocking to AT&T to get the iconic device.  However, since then, AT&T's exclusive deals have been less successful for the company.  Last July AT&T became the exclusive U.S. operator to sell Nokia's (NYSE:NOK) highly touted Lumia 1020 Windows 8 smartphone, which was only marginally successful.

Analysts said that the Fire phone will likely be a niche product to start, especially because of Amazon's decision to go with AT&T as its exclusive wireless partner. "I think they probably struck  deal with AT&T because they knew that selling this phone was going to require education and was going to require the ability to show people the device and extoll its virtues," IDC analyst Tom Mainelli told FierceWireless. "Clearly, AT&T is willing to put in the effort to train its associates to try to do that." Longer term, Amazon is likely going to want more carrier partners, he said.

Mainelli said it would be a challenge to get consumers to switch from a competitive smartphone platform, especially if they have been locked into apps and content on Google's (NASDAQ: GOOG) Android or Apple's iOS. The Fire phone, like Amazon's Kindle Fire tablets, runs a forked version Android and does not come with Google apps like Maps and Gmail, though Amazon's Appstore has 240,000 apps and games. "I think it's absolutely  a challenge," he said. "To get somebody to switch you need a piece of hardware that's notably better and arguably some other features that will get someone to go through the pain of moving from one [platform] to the other."

IBB Consulting analyst Jefferson Wang said that the "initial version of the Fire phone will be a niche product" but as Amazon addresses the gap in applications with other platforms, they could make a variant that appeals to consumers switching to their first smartphone, and makes good use of the MayDay button to ease that transition.  

Going with AT&T exclusively "almost proves that they're viewing this as more of a niche device," Wang said. "They want to get good numbers but they want to learn a lot from this."

Mainelli added that until Amazon gets developers to "create something that people will get genuinely excited about around the cameras and the potentially the Firelfy stuff I do think it's going to be a small volume product." For people who are die-hard Amazon customers, it's a "great delivery device" of content, he said,  "but the other phones in the market also deliver Amazon's content quite well."

 For more:
- see this release
- see this The Verge live blog
- seee this The Verge article

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Phil Goldstein contributed to this article.