According to a Bloomberg report, Amazon is working on a smartphone to compete with Apple’s iPhone and Google’s Android phones. Foxconn is reportedly working with Amazon on the phone, but the details on the hardware are not yet known. Besides working on the manufacturing and design, Amazon is supposedly trying to beef up its patent portfolio to protect itself against claims of patent infringement. Amazon refused to comment about a possible phone and upcoming patent deals when asked by Bloomberg.
If this rumor pans out, the cost of an Amazon smartphone would likely be heavily subsidized by Amazon. I wouldn’t be surprised to see Amazon pull a Kindle Fire and sell the phone near cost, with the intention of making money off books, music and movies. Though not hinted at in the rumor, it would be interesting to see if Amazon can negotiate a carrier deal to sell the phone with a discounted voice and calling plan. This latter prediction may be a pie-in-the-sky outcome, but it will be interesting to watch this rumor unfurl.