Will the new Amazon phone make AT&T a buy?

The carrier is expected to have the exclusive lock on the e-commerce company's upcoming device. Will this be the coup that the Apple iPhone was?

By Motley Fool Jun 17, 2014 2:38PM
Recent news reports suggested that AT&T (T) will be the exclusive carrier for Amazon's (AMZN) new phone, which the e-commerce giant is widely expected to reveal on Wednesday.

Investors may remember what being the exclusive carrier for Apple's (AAPL) iPhone did for the company, and there's excitement over the prospect that this new phone could have similar benefits for AT&T's bottom line.
Unfortunately, according to Motley Fool analyst Eric Bleeker this new phone won't have nearly the same positive impact for AT&T. Eric believes that while cool features like a 3-D display with retina tracking built in sounds like a bit of a gimmick, but more importantly he points out that the market is saturated with smartphones. While the iPhone was something that had never been seen before, Amazon will be trying to sell a phone to people who probably already have a pretty good one. Pedestrians walk by an AT&T store in Times Square on February 21, 2013 in New York City (© Ben Hider/Getty Images)

So should investors be buying AT&T shares on Tuesday's news? On the Motley Fool's Stock of the Day, Eric says that the only people who should buy shares of AT&T are those who want a nice boring stock for their portfolio. The company is up only 15 percent in the last three years, but it does pay a dividend with a 5.3 percent yield. With a P/E of 10 AT&T looks like a pretty decent income investment, but Eric doesn't think it's going to pop because of Amazon's new phone.

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