Amazon just announced the Kindle Fire, available in the US for $199, which aims to take on Apple’s iPad and all the other Android tablets on the market. However, according to a report by Citygroup, in 2012 the company might make a jump into the phone business too. Analyst Mark Mahaney and his team notes that the timeline is expected to be sometime in Q4. No indication of an OS is specified, but suggests that Amazon might need to fork over royalties to Microsoft – so most likely Android.
“Based on our supply chain channel checks in Asia led by Kevin Chang, Citi’s Taipei-based hardware research analyst, we believe an Amazon Smartphone will be launched in 4Q12. Based on our supply chain check, we believe FIH is now jointly developing the phone with Amazon. However, we believe that Amazon will pay NRE (non-recurring engineering fees) to FIH but the device and multiple components will actually be manufactured by Hon Hai’s TMS business group (the same business group that makes Amazon’s E-reader and the 8.9” Amazon tablet). We believe the smartphone will adopt Texas Instrument’s OMAP 4 processor and is very likely to adopt QCOM’s dual mode 6-series standalone baseband given QCOM has been a long-time baseband supplier for Amazon’s E-reader.”
The now rumoured “Kindle Phone” is estimated to cost between $150 to $170 to build, which Mahaney says that “For a normal brand like HTC, they need to price the product at US$243 to make 30% gross margin. If Amazon is actually willing to lose some money on the device, the price gap could be even bigger.”
If true, this will not be coming to Canada for a very long time.