AT&T Mobility (NYSE: T) is hoping to hit another home run by becoming the exclusive operator to offer Amazon's (NASDAQ:AMZN) new smartphone, which is expected to make its debut tomorrow. According to the Wall Street Journal, which cited sources familiar with the plans, AT&T will extend its existing relationship with Amazon, in which it provides cellular connectivity for Amazon's Kindle e-reader and tablets, to the smartphone.
AT&T, of course, was the initial exclusive wireless carrier for Apple's (NASDAQ: AAPL) iPhone for three years after it launched in 2007. During that time, AT&T benefitted greatly from the exclusive relationship by attracting many new customers that wanted the iconic device.
AT&T is hoping for a repeat of that scenario by being the exclusive provider of Amazon's device, which is expected to differentiate itself from existing smartphones in the market by having a 3D screen capable of showing images in 3D without special glasses. The phone is also rumored to have retina-tracking technology.
Amazon is expected to begin shipping its new smartphone by the end of September, ahead of the popular holiday shopping season, the report said.
Amazon is taking a big risk by jumping into the highly competitive smartphone market. The handset market, which according to IDC generated $338.2 billion in 2013, has seen growth from firms like Lenovo and Xiaomi that are focused on developing countries while companies focused on developed countries like Apple and Samsung have seen their growth slow.
However, some experts believe that Amazon will have some built-in strengths, such as being able to push content like music and games to consumers via its online store.
The speculation leading up to Amazon's anticipated smartphone launch has been building. Earlier this week, the New York Times speculated that the real reason the retailing giant wants to get into the smartphone business is to remove friction from the retail experience so that customers can more easily make purchases with their device.
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