All old rumors are new again this week. After resurfacing the iPad mini rumors Tuesday night, Bloomberg has also revisited speculation that Amazon may be planning to build its own smartphone.
Citing “people familiar with knowledge of the matter,” the report says that Amazon is developing an Android device and that it is being made by Foxconn.
The retail giant has, of course, already had some success with building its own hardware with the Kindle and the Kindle Fire, meaning that it’s overcome one of the biggest hurdles that a company like, say, Facebook would have making a leap into phone manufacturing.
The smartphone market comes with its own additional difficulties — namely dealing with carrier partners.
For its Kindle readers, Amazon has bought service from cellular networks in bulk, which is slightly different than the way most smartphone makers get service for their devices. All Things Digital brings up an intriguing thought in its take on the news, saying that Amazon could set up the same system for its phones.
Another issue is competition. The tablet market is very different from the smartphone market. Amazon was able to waltz in with the Kindle Fire at a price point it picked because there were few standout options in that part of the market. That’s not true with smartphones, however, where the company would have to face off with the HTCs, Motorolas and Samsungs of the world.
There’s also the question of what, exactly, Amazon would get out of making a phone. Making tablets is one thing: Amazon’s video, e-book, retail and — to a certain extent — music offerings make sense on a tablet, where they can be showcased very well. But a smartphone has to work in a different way and straddle work and play. It can’t be a pure consumption device, and Amazon will have to make some improvements to its system to work that way. For example, the e-mail program on the Kindle Fire leaves a lot to be desired and would likely frustrate anyone trying to compose more than a few lines on the device at a time.
If Amazon can lock customers in to its ecosystem of content on a smartphone, that would be a big boon for the company. That would be particularly true if it could take its trend of taking a loss or very small margin on its hardware, aka, offer its phone dirt cheap.