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KindlePhone by Amazon Lined up for Next Year

When Amazon announced that it would indeed be releasing a tablet of its own, it came as a bit of a shock to me. The Kindle Fire was a good try but in my opinion, it falls a bit short. To me, the main selling point of Fire will be the $199 price tag versus the base $499 iPad 2. Will this low price be enough to compete with the thus far unchallenged iPad? Who knows, only time will tell. Amazon certainly hopes so.

Perhaps Amazon will carry this same line of thinking over to a KindlePhone. That’s right, a KindlePhone. While details on said a device are scarce, it’s believed that Amazon will launch a KindlePhone in 2012. Android is expected to be the operating system of choice.

AllThingsD, citing the Citigroup research department:

“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 phone is epected to cost between $150 and $170 to manufacture, and the price could be as high as $243 if Amazon wants to make a 30% gross margin. However, it wouldn’t be crazy to assume that Amazon will take an initial hit on a KindlePhone by making it super cheap. Amazon loses money on the Kindle Fire by offering it at such a cheap price, but the company is hoping that consumer will buy in on the tablet.

Not unlike Apple, Amazon has a clear goal on creating an experience, not just a device. Amazon Kindle books, apps, music, movies, etc. are all used to keep customers anchored in the Amazon brand. So we can assume that this phone will offer a unique Kindle experience.

Originally written for Blu3Sn0w Development