Amazon (NASDAQ:AMZN) is working with smartphone maker HTC on three smartphones, according to a Financial Times report, once again fanning speculation that the retail giant is expanding its Kindle line of devices.
The report, which cited unnamed sources, said one of the three devices "is at an advanced stage of development," but that the timeline of the launch of that device could change and that Amazon may decide not to release it all.
The report said Amazon did not comment. However, in September, amid mounting speculation that it would soon launch a free phone, the company said: "We have no plans to offer a phone this year, and if we were to launch a phone in the future, it would not be free."
Analysts have said Amazon could use a smartphone to expand customer loyalty and use phones as another means through which it could sell goods and content. Mobile commerce-enabled transactions across the United States will reach $41.68 billion in 2013, increasing 68.2 percent from 2012 totals of $24.78 billion, research firm eMarketer reported last month.
HTC declined to comment on Amazon, but CMO Benjamin Ho said the company is "always exploring new opportunities."
"We have been very focused on building our own brand, but we have also been very open to co-branding and collaborating with carriers and other technology brands," Ho said.
If HTC did decide to partner with Amazon, it would mark a return for the company to its roots as a contract manufacturer for high-profile devices. HTC has spent the last several years expanding its own band but has run into trouble as oxygen in the Android ecosystem has been sucked up by Samsung electronics and its Galaxy line. HTC has also faced competition at the lower end of the market from Chinese handset makers and others.
Earlier this month, HTC reported its first quarterly loss since it became a public company in 2002, as it had warned it might, underscoring the challenges the company faces as it continues to try to turn around sales in a smartphone market that has squeezed its market share. The company just introduced the One max, a larger 5.9-inch variant of its flagship One smartphone, and Verizon Wireless (NYSE:VZ) and Sprint (NYSE:S) have said they will launch it later this year.
Amazon has been steadily expanding its Kindle device lineup, and in late September the company said it would offer LTE services from Verizon on its new Kindle Fire HD and Kindle Fire HDX tablets. Amazon previously only offered cellular services from AT&T Mobility (NYSE:T). Amazon said users will be able to choose AT&T or Verizon service when purchasing their device, and can then sign up for a service plan on their device. AT&T and Verizon each touted their shared data plans for the new Amazon Kindle Fires. The tablets run a modified version of Google's (NASDAQ:GOOG) Android platform that does not include Google's apps.
Rumors of Amazon's wireless ambitions do not stop at devices. Last month, the Internet giant was reported to have tested Globalstar's terrestrial low-power service (TLPS), possibly for use as a wireless connection for an Amazon in-home media hub. Amazon is said to be interested in TLPS for wide-area connections, which could replace expensive cellular service that currently delivers data to its Kindle-brand devices.
A July 1 FCC filing made by Globalstar investor and partner Jarvinian Wireless Application Fund noted that Globalstar was engaged in testing "to help a major technology company assess the significant performance benefits of TLPS for a transformative consumer broadband application."
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