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June 18, 2014

Amazon enters smartphone wars with Fire Phone

Amazon.com stepped into the smartphone ring Tuesday with the Fire Phone. Playing up Amazon's devotion to the individual customer and the media ecosystem it has built with its Prime subscription service, chief executive Jeff Bezos said that Amazon's growing universe of services set the phone apart.

The phone is available only to AT&T customers. According to a product page from AT&T, the phone starts at $199.99 with a 2-year contract for a 32 GB model. A 64 GB model costs $299.99. Amazon's own product listing for the phone indicates that it is $649.99 off-contract and will be released on July 25. Pre-orders for the phone open Tuesday.

Amazon is offering a free year of Amazon Prime membership, a $99 value, for those that buy the phone; current Prime subscribers will be able to add 12 months to their current membership at no cost. That is a limited time offer, though Amazon did not specify how long the promotion will run.

The Fire Phone is a 4.7 inch device that plugs directly into Amazon's Prime Video, Prime Music and cloud storage services. It also is closely integrated with the company's Kindle reading apps and Audible audiobooks services. Users can control the phone by tilting it, adding a three-dimensional element to its screen. Users can, for example, navigate through menus or maps just by moving the phone from side to side. The Fire Phone also employs eye-tracking technology, so that the image on the screen changes as the users moves his or her head.

The phone also lets you scan products in stores, so that you can buy things directly from Amazon, using a new service called "Firefly." Users can even use the phone to "listen" to songs or videos, and link users to places to buy them. It can also recognize art, and scan text such as phone numbers and then immediately place a call.

The phone has a quad-core 2.2 GHz processor, 2 GB of RAM and a screen meant to reduce the amount of glare from sunlight. It also sports a 13 MP camera, has advanced image-stabilization software, and includes unlimited photo storage through Amazon's Cloud Drive service. The company also introduced "tangle-proof" earbuds, according to a report from Re/Code.

There have been rumors for years that Amazon was looking at jumping into the smartphone market. The anticipation behind this event wasn't lost on Amazon. The company opened up invitations to all of its customers, 60,000 of whom applied. (300 customers made it in to the event.) It also sent a rather enigmatic gift to reporters set to cover the event: a copy of chief executive Jeff Bezos's favorite childhood book, "Mr. Pine's Purple House," which focused on the importance of standing out from the crowd.

The tech giant has already released a line of tablets to accompany its Kindle e-readers, and even tried its hand at a set-top box. And its growing suite of entertainment options, marked most recently by the release of a streaming music service for its most loyal customers, can make its devices more appealing.

But smartphones are a whole different animal. While the markets for other consumer electronics are a little more fluid, the smartphone industry is more or less dominated by Apple and Samsung, which control around 50 percent of the world's smartphone market between them.

Amazon appears to relying heavily on the goodwill its built with consumers to differentiate itself in that tight market.

"The most important thing we've done is to earn trust with customers," Bezos said, according to a report from Mashable.

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