Amazon is developing an Android-based smartphone to compliment its Kindle Fire tablet and Kindle e-readers, according to a new report.
Two unnamed sources told Bloomberg that Amazon is working with China-based factory Foxconn to build the device. The retail giant is also acquiring patents related to wireless technology that would protect it from lawsuits.
An Amazon phone has evidently been on CEO Jeff Bezos’s mind for some time. In August, he and VP Greg Hart applied for a patent for an airbag designed to protect smartphones from breakage. More recently, unconfirmed reports emerged that Amazon is developing its own mapping service.
Given that none of Amazon’s current devices are GPS-enabled, it makes sense that Amazon would invest in mapping technology if it was building its own smartphone.
Strategically, the introduction of a smartphone would be a brilliant move. Unlike Apple, Amazon doesn’t make a profit on its own hardware. Its profit margins are on all of the virtual goods it sells on its devices such as e-books, apps, songs and video.
If Amazon developed a smartphone, it would be able to sell those goods to a much larger market. According to Gartner, 467 million smartphones will be sold this year — about half of which will be Android.
By comparison, market research firm Gartner estimates, approximately 119 million tablets will be sold in 2012, less than a third of which will run Android.