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Market Update

Fire Smartphone Enhances Amazon's Network Effect

New device could keep customers in the Amazon ecosystem and drive cross-selling opportunities but will take time to gain traction in the global smartphone market.

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As expected,  Amazon (AMZN) unveiled its initial smartphone product on June 18, dubbed the Fire Smartphone. Many of the product features that had been rumored heading up to the event were confirmed, most notably "Dynamic Perspective," four front-facing infrared cameras and LEDs to produce a 3-D-like display, and head tracking sensors allowing for one-handed and auto-scroll navigation.

Management also touted Firefly as a key feature of the device, which utilizes Amazon's deep catalog of physical and digital content with image, text, and audio recognition technologies to quickly identify Web and email addresses, phone numbers, QR and bar codes, movies, TV episodes, and songs. In our view, this feature gives consumers less reasons to leave the Amazon ecosystem, and should drive cross-selling opportunities.

R.J. Hottovy does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.