Amazon is evolving into a full-fledged mobile device maker if the following report is accurate.
Citigroup Investment Research has published a memo that reveals that the mega online retailer is planning to launch a smartphone by the end of 2012. Here's an excerpt via Barron's:
We believe FIH is now jointly developing the phone with Amazon. However, we believe that Amazon will pay 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-inch Amazon tablet.) We believe the smartphone will adopt Texas Instrument’s OMAP 4 processor and is very likely to adopt Qualcomm’s dual mode 6-series standalone baseband given Qualcomm has been a longtime baseband supplier for Amazon’s e-reader.
At first, it's easy to ask why does Amazon even want to make a smartphone? What purpose could it fulfill in line with its ecosystem? The Kindle Fire tablet was more of an extension of its e-book reader series, but a smartphone is a different animal altogether.
However, the smartphone could serve to promote other Amazon products, such as its digital music service and other cloud solutions. There's also a chance that the smartphone would serve as a companion to the Kindle Fire -- hopefully more effectively than the BlackBerry PlayBook or the HP TouchPad were supposed to do with BlackBerry handhelds and HP Pre phone respectively.
Yet that really depends on how Amazon builds the smartphone. The Kindle Fire is Android-based, but same might not be said about the smartphone. AllThingsD reports that the memo was not clear on this issue.