Now that the Kindle Fire is out in stores, an analyst is already predicting that Amazon will have a smartphone in the market by 2012.
“Based on our supply chain check, we believe FIH is now jointly developing the phone with Amazon,” analyst Mark Mahaney said in a research note. “However, we believe that Amazon will pay NRE to FIH but the device and multiple components will actually be manufactured by Hon Hai’s TMS business group.”
This isn’t the first time we’ve heard of this and it actually makes sense to a certain degree. With the Kindle Fire, Amazon sees the tablet as an extension of its shopping service and that’s why it’s probably taking a loss per unit because it will likely make it up with book, movies and app sales. As more and more people use their smartphones as their primary computer, it would make sense for Amazon to want to hop into this market as well.
If this were to happen, I’d expect it to be like the Kindle Fire and run a forked version of Android that’s customized for the Amazon experience. As you would expect, it will probably be drop-dead simple to buy content from Amazon on the upcoming smartphone.
Here’s the thing though, it may be more difficult for Amazon to enter this market than the tablet market, unless the company is willing to take a massive loss on each handset. A $200 Kindle Fire is a very attractive price but without carrier subsidies, I have a hard time seeing an unlocked Amazon smartphone hitting the market for less than $400. Even if it could offer a super cheap phone, you’re still going to pay pretty much the same rates per month you would with another smartphone.
Additionally, in my brief time with the Kindle Fire, I’m not sure if Amazon is actually ready to compete against the top dogs in the smartphone market. The iPhone is still pretty darn good and Android makers are really hitting their stride. Heck, even Windows Phone is starting to show some signs of life.
Can Amazon really outdo these without a significant price advantage? It will be fun to watch it try.
[Via BGR]