Rumor Mill: Is Amazon preparing a smartphone for this year?

Amazon's Android-based Kindle Fire tablet has gotten off to a blazing start since going on sale less than six months ago. According to research firm comScore, the Kindle Fire already controls more than half of the U.S. Android tablet market. Will a smartphone from Amazon be next?

Amazon Kindle Fire

Amazon could follow its Kindle Fire with a smartphone.

Several analysts think the web services and online retailing company could be cooking up a smartphone for later this year, though there is no concrete proof that a smartphone is definitely coming. In early April, Topeka Capital Markets analyst Brian White said it's a distinct possibility. "Our research suggests Amazon is currently working on a smartphone that we believe is planned to launch this year and could prove to be more sophisticated than many smartphones on the market," he wrote in a research note, according to AllThingsD. He also suggested that Amazon will release versions of the Kindle Fire with larger screens later this year.

An Amazon spokeswoman could not immediately be reached for comment.

Other analysts are chiming in on the possibility and seem to think it would make sense for Amazon, which makes money off the content users access on its devices, not on the hardware it sells. Like the Kindle Fire, which runs on a modified version of Google's (NASDAQ:GOOG) Android platform but is focused on Amazon's cloud services, the smartphone would likely be an Android-based product. A smartphone would extend the Kindle Fire's reach by making Amazon's mobile, application storefront and shopping services more ubiquitous, analysts said.

"The lock-in effect of a great content ecosystem shouldn't be under-estimated." ABI Research analyst Aapo Markkanen told Wired. "If Amazon builds up a sizable customer base for its devices, and many of those customers find its content offerings appealing enough, then that would mean a tougher market environment for Apple, as well."

Like the Kindle Fire, an Amazon smartphone, acting more as a hub for content, would likely have thin hardware margins, which could put pressure on low-end Android OEMs. Still, a forked Android experience could be a tough sell for developers. "The further they go out on their own branch of Android, the tougher it gets for developers," Forrester Research analyst Julie Ask told Wired.

For more:
- see this Wired article

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