Report: Amazon smartphone production may start by year-end

Amazon's rumored smartphone is currently being tested and mass production of the new device may start as early as year-end, according to a report in the Wall Street Journal. The online retailer, which currently sells the Kindle Fire tablet, is rumored to be expanding its device portfolio and entering the crowded smartphone market. Citing unnamed officials at some of Amazon's parts suppliers, the WSJ report said that mass production of Amazon's smartphone could begin by later this year or early next year.

Sources also said that Amazon's device is being tested with a screen that measures between four and five inches, which is approximately the same size as the screen rumored to be on Apple's (NASDAQ:AAPL) next iPhone. The next-generation iPhone  is expected to make its debut later this year. Samsung also has a larger screen smartphone, the Galaxy S III, with a 4.8-inch screen. Samsung also sells the 5.3-inch Galaxy Note.

Last week, Bloomberg reported that Amazon was considering making a smartphone that would run Google's (NASDAQ:GOOG) Android platform. Rumors about Amazon's interest in the smartphone market have been circulating since 2010. The Bloomberg report, which cited unnamed sources familiar with the matter, also said Amazon hired Foxconn International to build the device.  

A potential Amazon smartphone raises several interesting issues. Unlike many OEMs, Amazon could lose money (or make very little of it) on the hardware while recouping it via digital content sales. However, Amazon also would likely not have access to all of Google's Android services, such as Gmail and the Google Play storefront, since Amazon's current Android devices run a modified version of the platform.

For more:
- see this WSJ article (sub. req.)

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