Weeks after Amazon launched the Kindle Fire to lukewarm results, rumors are circulating that the bookseller giant is planning a smartphone launch.
The rumor’s genesis comes from a market intelligence report by Citigroup’s Mark Mahaney that states, “based on our supply chain channel checks in Asia led by Kevin Chang, Citi’s Taipei-based hardware research analyst, we believe an Amazon Smartphone will be launched in 4Q12. Based on our supply chain check, we believe FIH is now jointly developing the phone with Amazon.”
Mr. Mahaney noted that the device will likely be powered by Texas Instrument’s OMAP 4 processor, and will likely run Google’s Android OS. In addition, Amazon will give Microsoft an “OS royalty”; this tithe is for patents that Microsoft claims Android uses.
The report speculates that the device will cost Amazon $150 to $170 to manufacture, and the company will likely sell it at cost to give it a competitive edge in the ever-crowded smartphone market. In comparison, Amazon currently sells that Kindle Fire at a los of $2.70 per unit.
“With the clear success of the Kindle e-Reader over the past 3 years, and Kindle Fire possibly succeeding in the low-priced Tablet market, we view this as the next logical step for Amazon,” Mr. Mahaney concludes.