Amazon rumored to be prepping smartphone release in late 2012

Fri, Nov 18, 2011

News, Rumors

The more I read about Jeff Bezos, the more I like him. Recently, Wired had a fascinating interview with the Amazon founder that really delves into the psyche of Bezos and how he views Amazon’s current position and future in the tech marketplace. Much like Steve Jobs, Bezos to his credit doesn’t overly concern himself with what competitors are doing or what the critics are saying. Rather, he forges ahead, driven only by his own vision.

And that vision, which first started with selling books online, has gotten increasingly grandiose and layered over the years. Today, Amazon ships everything from books and movies to toys and clothes. Recently, they unveiled the Kindle Fire, a tablet-based media consumption device.

And if we’re to believe Citigroup analyst Mark Mahaney, Amazon will continue to push the envelope with plans to release a smartphone sometime during the fourth quarter of 2012 and will reportedly be manufactured by Foxconn.

All Things D relays Mahaney’s report:

However, we believe that Amazon will pay NRE (non-recurring engineering fees) to FIH but the device and multiple components will actually be manufactured by Hon Hai’s TMS business group (the same business group that makes Amazon’s E-reader and the 8.9” Amazon tablet). We believe the smartphone will adopt Texas Instrument’s OMAP 4 processor and is very likely to adopt QCOM’s dual mode 6-series standalone baseband given QCOM has been a long-time baseband supplier for Amazon’s E-reader.”

So far, initial reviews of the Kindle Fire have been abhorrent, but we doubt that will do anything to sow down Amazon’s smartphone plans. Leveraging the strength of its content ecosystem, not to mention the landing page, we imagine the Kindle Fire will sell well despite poor usability reviews and will pave the way for an Amazon smartphone.

Mahaney believes Amazon’s smartphone will cost anywhere between $150 and $170 and may sell for about the same amount. So much like the Kindle Fire, Amazon won’t be making a killing on the hardware but will attempt to recoup its investment via content sales. That’s a dangerous proposition that may work in the video game realm but seems to be a riskier proposition with respect to smartphones and tablets.

So should Apple be worried?

Not really.

During the third quarter of 2011, the iPhone 3GS was the second most popular smartphone on the market. Today, consumers can pick it up for free with contract on AT&T. That said, there’s nothing to indicate that a cheap Amazon smartphone would have anything on Apple’s iPhone – especially when you consider that the iPhone 4 may very well be free with contract at this time next year.

So if anyone else should be worried, it’s other Android manufacturers.



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