Amazon is reportedly developing a smartphone, with the aim of competing with established players like the Apple iPhone 4S and the Samsung Galaxy S III. Given the Amazon Kindle Fire tablet's success in the low-end tablet and e-reader market, will Amazon likewise succeed in selling its Android-powered smartphones using content as a draw?
Amazon is currently working with component suppliers in Asia in testing a smartphone, reports the Wall Street Journal. Sources cited by the WSJ say that the device would have a screen between four and five inches, and is likely to run Android, which also powers Amazon's Kindle Fire.
Officials at some of Amazon's parts suppliers say the company may start mass producing its smartphone sometime late 2012 or early 2013.
(Not So) Secret Recipe
According to the sources, Amazon's upcoming smartphone will feature the same integration with Amazon services that the Kindle Fire offers, particularly in terms of content like e-books, music and video, as well as Amazon's retail store.
There is question whether Amazon can replicate its success with the Kindle Fire in launching a smartphone that gives users easy access to Amazon content. The Kindle Fire is currently third place in the tablet market, behind the apple iPad and Samsung Galaxy Tab series, with a 5 percent market share.
ZDnet says that launching an Android smartphone later this year is likely to coincide with a market upheaval resulting from the decline of RIM and its BlackBerry platform. BlackBerry currently takes the third spot in the U.S. smartphone market, although newcomers like Microsoft's Windows Phone 7 platform -- and the platform's flagship Nokia Lumia phones -- are rising fast. The launch of Windows 8 this October would also be a big deal for Microsoft, which announced that Windows Phone 8 will launch with the same underpinnings as its desktop-bound counterpart.
An Amazon smartphone launch could catapult the retail giant into this coveted spot in the market.
Cheap Smartphones on the Rise
But even amid the popularity of Apple and Samsung on the high end of the market, cheap smartphones proliferate, especially in emerging markets like China, where fairly capable Android-powered phones can sell for as low as US$ 100 or even less. An example is the XiaoMi MiOne smartphone, which is hugely popular in the Chinese market as an affordable smartphone that focuses on content.
Amazon could be targeting a similar market, which means the company might focus on selling low-end devices to get users to buy Amazon content. The company is even selling its Kindle Fire at a loss, but is reportedly recouping these losses from content sales. IDC predicts that global smartphone shipments will reach 686 million units this year, which is a 38.8 percent growth from 2011 figures. Will Amazon be able to get a big enough slice of this growing pie with a cheap, but content-rich smartphone?