Amazon Stands to Make Billions from Their New Smartphone

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On June 18th, Amazon will launch... something. They haven't given any further details about the event, but the invitational website has a device similar to a smartphone lurking in the corner. Between that and circulating rumors of a 3D phone, all signs point to the product launch of a mobile device. 

Amazon's phone is rumored to have 3D capabilities, and last week, a similar phone from Windows was leaked. As the 3D phone competition heats up (though none are on the market yet,) it creates a new dimension to the smartphone market.

Forbes predicts that Amazon will "sell the device at cost in order to boost $99 Amazon Prime subscriptions that will in turn increase Amazon’s e-commerce revenues." The estimated cost is $300 (all those cameras don't come cheap.) 

In 2013, almost a billion smartphones were sold worldwide. Apple currently has about 15 percent of the market and Android is just over 31 percent. If Amazon manages to get just one percent of the market, that will be 10 million phones sold. At $300 each, that is about $3 billion in sales. Amazon had $74.5 billion in revenue last year.

There is also money to be made from the $99 Prime subscriptions. Right now, there are 20 million Amazon Prime members. "If Amazon can sell half of the guessed-at 10 million smartphones to people who sign up for Prime — those five million new subscribers would add $495 million to its Prime revenues and a likely increase to Amazon’s e-commerce revenues as well," explains Peter Cohan.

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Then again, the Amazon phone could be a major flop. Windows, Microsoft and Motorola are working extremely hard to build a smartphone following, and now, even Facebook is getting in on the mobile market. Considering the over saturation of the smartphone market, Amazon may have a harder time gaining that one percent of the market than it would have several years ago. 

Still, for $300, that's a small price to pay to test out 3D capabilities right in the palm of your hand. 

This article is from the archive of our partner The Wire.