Rumours hint at Amazon smartphone launch
Monday, November 21, 2011 - 10:13:30
Web retailer Amazon may have only just unveiled its first full tablet device in the form of the Kindle Fire, but now industry insiders are suggesting that the firm could also be entering the mobile market with its own smartphone.
Recent analysis suggests that Amazon is selling the Kindle Fire for slightly less than it actually costs to produce, taking a loss in order to build up a user base. Now experts at CitiGroup have said that it will be taking a similar stance with a budget smartphone handset that could be out in the second half of 2012.
Amazon is allegedly working with Foxconn in order to produce the smartphone, which could be sold for around £107 if it repeats the trick of matching its raw production costs with its retail price.
It is a bold move, with most other mobile firms choosing to mark up handsets to a significant degree and Apple charging over £300 more for the iPhone than the basic value of its component parts.
Of course Amazon is going for a very different part of the market, presumably looking to get first time smartphone buyers onboard, just as it is aiming at those who have never used tablets with the Kindle Fire.
If Amazon does create a smartphone then it will probably run Android given the use of version 2.3 on the Kindle Fire. Amazon has been keen to put its own stamp on Google's platform and the same would almost certainly be true of any mobile produced by the firm.
Some are sceptical about the chances of Amazon creating a mobile which would lose money. This is because the method works for tablets, as there is a greater emphasis on getting customers to buy content such as books, music and movies from Amazon, but this would be less of a money-maker on a dinkier mobile platform.
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