Amazon CEO Jeff Bezos has unveiled a new smartphone called Fire Phone.
Smaller than leading Android phones, but larger than Apple's iPhone, Bezos has called the screen, measuring 12cm diagonally, ideal for one-handed use.
Bezos opened the event by talking about its $US99 ($A107)-a-year Prime membership.
It began with free shipping but has expanded to include free video streaming, e-book lending and more, while viewing Prime content is expected to be a component in the new phone.
Bezos then talked about advances in Amazon's hardware.
He says early devices got mixed reviews, but the gadgets have improved since then, with research showing Amazon's brand to be strong.
Amazon.com Inc. got its start in books and soon moved into music, video, devices and more.
Analysts believe the goal of an Amazon-branded smartphone is to get customers to buy more things from the nation's largest e-commerce company.
The device might include an Amazon shopping app or other features tied to the company's products and services.
But competing won't be easy. Amazon is arriving late to a tightly contested marketplace.
Samsung and Apple dominate worldwide smartphone sales with a combined 46 per cent share, according to international technology data research firm IDC. And in the US, Apple leads with more than 37 per cent, with Samsung at nearly 29 per cent.
Amazon has tried to chip away at Apple's top position in the tablet market with its Kindle Fire HDX tablet, which beats the iPad Air's screen resolution and is lighter and cheaper.
Still, the iPad dominates the category while Amazon has seen its market share shrink from seven per cent in 2012 to two per cent in the first quarter of this year.
But that hasn't stopped Amazon. In April, the company started selling its Fire TV video streaming device to compete with similar gadgets from Apple, Google and Roku.
Like Amazon's other gadgets, Fire TV offers easy access to content that consumers buy from Amazon or get for free with Prime.
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