Rumor: Amazon Working on Smartphone to Compete with iPhone

For several years, Amazon was known as an online retailer that also sells a widely successful lineup of Kindle eReaders. Then, late last year, the company decided to make a splash into the tablet industry with its inexpensive Kindle Fire. While the Kindle Fire has never been viewed as a direct competitor with the iPad, instead catering to the low-end tablet market, it has still been a huge success for Amazon despite declining sales in recent months. Amazon was able to sell the Kindle Fire at such a low price by pushing sales of its massive digital content library on the tablet. But now, Amazon has a new product up its sleeves.

Now that Amazon has established itself as a consumer electronics maker, Bloomberg reports that the company is developing a smartphone that will compete with Apple’s iPhone and mobile devices that run Google’s Android operating system. Amazon is said to be working on the smartphone in partnership with Far East manufacturer Foxconn, according to people familiar with the matter. By releasing a low-priced smartphone, it would be yet another venue for Amazon to push sales of its digital music, movies and books.

It’s going to be incredibly hard to compete with Apple and Samsung, but Amazon could be able to carve out its own niche in the smartphone market. According to numbers by research firm IDC, Apple and Samsung shipped a combined total of 398.4 million smartphones in the first quarter of this year alone. Nevertheless, it is said that Amazon will pursue its smartphone plans by acquiring wireless technology patents to help fend off any patent infringement accusations that might arise from competitors; perhaps Facebook, which is also rumored to be working on a smartphone.

[Bloomberg]

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