The smartphone market can be cruel. With Apple and Samsung making most of the profits, even established players like HTC, Motorola, and LG have struggled. Newcomers may face even longer odds. According to industry sources, though, Amazon is ready to take its chances with a budget-friendly Kindle phone.

Last July, the Wall Street Journal reported that Amazon was testing its own smartphone with a 4 to 5-inch screen. Today Taiwanese Economic News revived the old rumor, saying that Amazon has awarded the phone's contract to Foxconn, the same company responsible for manufacturing the iPhone.

Low price, small initial orders

CEO Jeff Bezos would love to shake up the smartphone market

The source says that the Kindle phone will retail for US$100-200 (presumably off-contract), with Amazon supposedly set to announce the phone in the second or third quarter of 2013.

If the sources have their information straight, then Amazon may be entering the market cautiously. The initial order is allegedly for a mere five million units: small potatoes for a company with Amazon's following. It's also possible that the company will place more orders before the device launches.


If these rumors prove true, then Amazon will be hoping to emulate the Kindle Fire's success in the tablet market. If the phone packs a fast processor and Retina-quality screen with an attractive design, a sub-$200 off-contract price could turn lots of heads. Amazon's online presence alone would guarantee maximum visibility.

Amazon would presumably use a modified version of the Kindle Fire tablet software (which, itself, is a modified version of Android). The company already has its own established Android app marketplace, featuring software that runs on both tablets and smartphones.

It's too soon, however, to jump to conclusions. Industry leaks can be off-base, and carrier politics (particularly in the U.S.) have botched many a high-profile launch. If these leaks hold any weight, though, you can bet on hearing more in the coming months.

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