Seeking to build on its expansion into e-readers and tablet computers, Amazon.com Inc is working on a smartphone that will go on sale in the fourth quarter of next year, according to Citigroup Inc.
The phone will be a mid-range device that uses a processor from Texas Instruments Inc and connectivity chips from Qualcomm Inc, said Mark Mahaney, a San Francisco-based analyst at Citigroup, citing research by Asian colleagues.
The total list of components won’t exceed US$100, he said.
“Based on our supply chain channel checks in Asia led by Kevin Chang (張凱偉), Citi’s Taipei-based hardware research analyst, we believe an Amazon smartphone will be launched in 4Q12,” Citigroup analyst Mark Mahaney said.
“We believe [Foxconn, (富士康)] is now jointly developing the phone with Amazon,” Mahaney said, and that it would be manufactured by Hon Hai Precision Industry Co’s (鴻海精密) TMS business group, which makes Amazon’s Kindle electronic book reader and Kindle Fire tablet.
The Citigroup analysts said they believed the Amazon smartphone would use an OMAP 4 processor from Texas Instruments and would cost about US$150 to US$170 to make.
“With the clear success of the Kindle e-reader over the past three years, and Kindle Fire possibly succeeding in the low-priced tablet market, we view this as the next logical step for Amazon,” Mahaney said.
Amazon’s Kindle is the best-selling e-book reader, and its new tablet computer, the US$199 Kindle Fire, is going up against Apple Inc’s iPad this holiday season. That has set the stage for Amazon to push into mobile phones, Mahaney said.
The idea would be to use the device to sell more digital media, such as books and music, rather than making money on the phone itself.
Drew Herdener, a spokesman for Seattle-based Amazon, did not respond to a request for comment.
Heather Ailara, a spokeswoman for Dallas-based Texas Instruments, and Emily Kilpatrick, a representative of Qualcomm in San Diego, declined to comment.
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