Amazon.com, Inc.’s (NASDAQ:AMZN) new smartphone, expected to be unveiled today, may become a big bust for the company, Kevin O’Leary said in a discussion on CNBC.
According to the “Shark Tank” investor, the launch of a 3D smartphone from Amazon.com, Inc. (NASDAQ:AMZN) may be a big mistake. He explained:
“I think it’s a big mistake for Amazon. I’ll explain why. This puts them more into the consumer electronics space. In the mobile handset or provision industry, if you don’t get 5% market share within a couple of years, you’re losing money. And you can look at lots of situations where firms have been in this space, a great one would be RIM. The thing has less than 2% market share on its way to zero. And I think Amazon is going to start to be compared more and more to consumer electronics companies and above all for investors like me, show me the cash flow.”
He went on to say that he likes the deal for AT&T Inc. (NYSE:T) which is rumored to be the sole carrier of the smartphone when it comes out. According to O’Leary, the carrier has a solid track record in terms of its cash flow and dividend payout.
The CNBC team also discussed how the deal can benefit AT&T because it gives the company the ability to offer customers another reason to switch to them. Watch the video below.
In another interview also on CNBC, John Simons, Associated Press technology and media editor, said that what is important for Amazon.com, Inc. (NASDAQ:AMZN) at the moment is to debut a phone that will have a different experience that vastly improves shopping in order to sell the phone. He said that the smartphone market is a very competitive market and that competing in it is going to be very hard for the web commerce giant. Simons added that the company may be targeting a more affluent customer, an Amazon Prime-type customer who buys using the company a lot of times the whole year.
Amazon.com, Inc. (NASDAQ:AMZN) shareholders includes Edmond M. Safra’s Ems Capital which had 96,000 shares in the company as of the end of March. Also at the end of the first quarter, Michael Pausic’s Foxhaven Asset Management reported 80,633 shares in the internet giant.