Amazon is rumoured to be developing its own smartphone, the Bloomberg news agency reported Friday, reinforcing earlier reports that the online retailing giant was hoping to enter the smartphone market around the end of the 2012 fiscal year.
Two inside sources reportedly told Bloomberg that Amazon.com Inc. is working with Chinese mobile device manufacturer Foxconn to build a smartphone that will run on the Android operating system.
The device would be another vehicle on which to promote Amazon's digital books and music products. The company that started out as an online retailer of books in 1994 entered the mobile device market in 2007 with the launch of its first e-reader, the Kindle, and has since added a tablet, the Kindle Fire, to its stable of products.
Bloomberg said part of Amazon's smartphone strategy is also to acquire patents for wireless technology. Apple, Microsoft and other makers of mobile devices have been in a race to beef up their portfolios of telecommunications patents for years.
For example, patents were a large part of what made Google's $12.5 billion acquisition of Motorola last year so lucrative as Motorola Mobility held more than 17,000 patents.
There had been indications in the past that Amazon founder Jeff Bezos was eyeing the smartphone market. He and Amazon vice-president Greg Hart filed a patent last year for a tiny smartphone airbag, GeekWire reported.
The smartphone market is a profitable and growing one, with 398.4 million units shipped in the first quarter of 2012, according to market analysis firm IDC. IDC reported in May that the global smartphone market grew by 42.5 per cent in the first quarter of 2012, with Samsung inching ahead of market-leader Apple.
The news of Amazon's potential entry into the smartphone market came on a day when Samsung reported record quarterly earnings that it said were driven mainly by rising sales of its Galaxy smartphone. Samsung reportedly made about $4 billion, or about 65 per cent of its operating profit, from mobile sales in the second quarter of 2012.
Amazon is also believed to be planning the launch of its own mapping software. Gigaom reported this week that the company recently purchased the 3D mapping startup UpNext in hopes of finally bringing GPS capability and maps to its Kindle Fire tablet. Currently, Kindle users have to download third-party Android mapping applications.