Citigroup Says Amazon Phone Coming In 2012

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By Peter Kafka, Amazon KindlePhone for 2012? via All Things D

Amazon just rolled out a full-fledged tablet. Next year, says Citigroup's research department, it could have its own phone. Here's the topline from analyst Mark Mahaney's newest note:

"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. Based on our supply chain check, we believe FIH is now jointly developing the phone with Amazon. However, we believe that Amazon will pay NRE (non-recurring engineering fees) to FIH but the device and multiple components will actually be manufactured by Hon Hai's TMS business group (the same business group that makes Amazon's E-reader and the 8.9" Amazon tablet). We believe the smartphone will adopt Texas Instrument's OMAP 4 processor and is very likely to adopt QCOM's dual mode 6-series standalone baseband given QCOM has been a long-time baseband supplier for Amazon's E-reader."

Mahaney and his team guess that Amazon's phone may cost it $150 to $170 to build, and it's conceivable that the company will sell it for something close to that price: "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's note doesn't spell out that the phone will use Google's Android operating system, but it suggests that will be the case by positing that that Amazon will need to pay Microsoft an "OS royalty" -- Microsoft has recently been able to extract royalty payments from other Android hardware partners.

Amazon KindlePhone for 2012? via All Things D

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Comments

[NHBill]

04:21 PM on 11/19/2011

The real question for Google is this...
Why would hardware makers continue to support Android if Amazon can sell competing hardware at a loss?
When (not if) Amazon comes out with a full featured smart phone for below wholesale with no contract how does Samsung compete?
How long before the hardware is free with a subscription to Amazon?
How long before Walmart starts making their own Android products?
All this of course is Great for us the consumer!!

[Steven Travis]

10:53 PM on 11/17/2011

What would an Amazon phone bring to the table?

[six seven]

10:44 AM on 11/18/2011

Content.

[Steven Travis]

01:56 PM on 11/18/2011

They already have that with the Kindle Fire (just add 3G to it and go)

[NHBill]

04:25 PM on 11/19/2011

Put on your thinking cap.

[rewith85man]

10:23 PM on 11/17/2011

Amazon is going on top.

[Adrienne Williams]

07:54 PM on 11/17/2011

wow love that ego-friendly Amazon Fire box! LOL I know, I'm so geeking out! i want mine now!

[Thomas River]

03:06 PM on 11/17/2011

"Amazon just rolled out a full-fledged tablet"

Ummm, no. They did not. They rolled out a full-fledged e-reader that can also be used as a half-fledged tablet. Add more memory, more apps, at least one camera, at least mobile 3G, better resolution, bluetooth, etc., etc - then you can roll with the big boys.

[Larry Chandler]

08:16 PM on 11/17/2011

At some point I'm sure they will, but for now Amazon is more interested in selling media than in having their Kindle Fire be used as a real tablet. For the price of $199, it does what it does reasonably well. Not everyone needs a Lexus when a Corolla will do.

[NHBill]

04:23 PM on 11/19/2011

yeah but Tom is proper to correct the silly opening line in this report.

[Adrienne Williams]

10:33 PM on 11/17/2011

why? really if I can barely hold up my android phone to take a picture why the heck would I want to hold a 7in tablet to take a picture? lol some times just getting what it's used for is best. reading, music, movies, games. that's all I want. if I wanted to do more I would use my laptop!

[NHBill]

04:24 PM on 11/19/2011

?