Amazon smartphone to debut during holiday season?

Faith Merino · July 11, 2012 · Short URL:

Amazon is said to be testing the smartphone now, which could have it available in time for holidays

It looks like the Amazon smartphone may be here sooner than we thought.  Last week, Bloomberg reported that Amazon is indeed developing a smartphone, and now the Wall Street Journal is hearing from insiders that Amazon is actually in the testing phase, which means Amazon could be putting out a smartphone as soon as the end of the year—also known as the holiday season.

According to WSJ’s sources, the smartphone has a 4-5 inch display, which would make it slightly larger than the iPhone, which has a 3.5 inch display. 

Previous reports have said that Amazon is working with Apple’s own Chinese supplier, Foxconn, and that the phone will run Google’s Android OS.  

Samsung currently holds the lead among smartphone vendors, shipping 38 million smartphones worldwide last quarter, according to Gartner.  Indeed, 40% of all Android-powered phones were made by Samsung.  Apple shipped 35.1 million iPhones last quarter.  All told, 144.4 million smartphones were sold worldwide last quarter, an increase of 44.7% over last year.

Amazon is definitely Lord and Emperor of the holiday season.  The company began shipping the tablets in November, just ahead of the holiday shopping season, and sold nearly five million units in the last quarter of 2011.  Prior to the release of the Kindle Fire, all non-iPad tablets sold 1.2 million units in the first three quarters of 2011, according to the NPD Group.

In the same quarter that Amazon sold nearly five million Kindle Fire tablets, Apple sold over 15 million iPads.

Citigroup analyst Mark Mahaney floated the idea way back in November, just days after Amazon began shipping the Kindle Fire.

“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,” he wrote in a note.  He guestimated that the phone would cost somewhere between $150 and $170 to build, and that Amazon would sell it for around that price point.  “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,” Mahaney wrote.


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