Amazon may be developing a smartphone for 2012

Citigroup's research department is predicting that Amazon will put out a smartphone in Q4 of 2012. Citigroup's Mark Mahaney has put out a note saying that his hardware research team in Taipei, led by analyst Kevin Chang, is making the prediction based on what they have seen in the supply chain in Asia. Apparently, the supply chain checks make it seem as though Amazon is working with Foxconn to develop the phone for release late next year. 

The team believes the phone will be powered by a TI OMAP 4 processor, and could cost as little as $150-170 to build, and Amazon could sell the device at a very low margin. It may not be the loss-leader that the Kindle Fire is, but Amazon could still undercut competition. 

It seems like the natural progression for Amazon. Assuming the so-called "Kindle phone" would focus on selling Amazon content, as the Kindle Fire does, a phone is an easy leap for Amazon, because the market for smartphones is simply bigger than that for tablets. Even the market-leading iPad sells a fraction of what the iPhone sells. 

source: AllThingsD