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Amazon smartphone mock-up
Rumours: Amazon preparing its own smartphone.
Foxconn , the Chinese mobile- phone maker, is working with Amazon on the device, said one of the people, who asked not to be identified because the plans are private.
Amazon is seeking to complement the smartphone strategy by acquiring patents that cover wireless technology and would help it defend against allegations of infringement, other people with knowledge of the matter said.
Amazon could have a smartphone on store shelves by the fourth quarter of next year, according to Citigroup analyst Mark Mahaney.
“Based on our supply chain check, we believe Foxconn is now jointly developing the phone with Amazon,” Mahaney wrote in a research note. “However, we believe that Amazon will pay Foxconn but the device and multiple components will actually be manufactured by Hon Hai’s TMS business group.”
Additionally, Mahaney said that Amazon will likely use a Texas Instruments OMAP 4 processor, and that it will adopt Qualcomm’s dual-mode 6-series baseband chip as well.
“For a normal brand like HTC, they need to price the product at $243 to make 30 percent gross margin,” Mahaney wrote.
“If Amazon is actually willing to lose some money on the device, the price gap could be even bigger,” he explained, noting that Amazon’s device could be sold for between $150 and $170, or about the price it will cost to build the phone.
Sources: Bloomberg and our Before related article: