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Amazon today joined the smartphone wars, with its own device, the Amazon Fire, a device designed to let you talk on the phone, take great photos and sell you more products.

It will go on sale July 25th, exclusively at AT&T, for $199 with a two-year contract. Amazon is offering one year free of it's Prime service--free two-day shipping and access to streaming movies, TV shows and music,to new purchasers.

The big feature innovation on Fire is "Firefly," a new tab that can recognize "over 100 million" items from the Fire cameras and microphone, everything from QR codes and web URLs, to the names of books, DVDs and household products, to the names of songs and titles of TV shows, like the Shazam app.

It's being sold as a way to point the phone at anything, and either learn more about it--or buy it on the spot. At the press conference, Amazon said it would work with popular calorie counting and tracking app MyFitnessPal. Use Firefly with the app to point at food, and Fire will tell you the nutritional value of the selection.

And what of the 3D screen that analysts had expected in the phone? It turns out there are 3D features for viewing maps, and Amazon doesn't call it 3D, but instead "Dynamic Perspective." Tilting the phone in different ways will give you different looks.

The phone is Amazon's latest foray into hardware, following its successful line of Kindle e-readers and media players.

Fire has a 4.7 inch LCD screen, with a 2.2 GHZ processor, 2 GM of RAM, a 13 megapixel rear facing camera and four front-facing cameras.

The four cameras (as opposed to just one on most smartphones) will give shutterbugs the ability to capture images in lower light, Amazon said. The cameras can track your face and those of your friends.

Additionally, Bezos said users of the phone would get unlimited photo storage on Amazon's Cloud Drive. (It currently offers 5 GB for free.)

He sold the phone as a vehicle to read books from the KIndle library, and watch movies, via Amazon's Prime offering.

With Fire, Amazon will join industry giants Apple, Samsung, Google, Blackberry, HTC and Nokia in the smartphone race, which is dominated by Samsung and Apple.

Robert Peck, an analyst with SunTrust, believes a hit phone for Amazon could make a huge impact on the bottom line, to the tune of $2 billion. Peck estimates sales of 2.7 million phones, mostly to Amazon's Prime customers. "We assume that each new customer buys 10 items per year," from the phone, Peck says, at $50 each.

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