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Amazon is working on a smartphone for the end of next year, according to a note from Citigroup analyst Mark Mahaney.He says the phone is being developed by Amazon with Foxconn’s help. It will be a “mid-end” phone, not running on the latest greatest chipsets.
Amazon will try to compete on price, like it does with the Fire. Mahaney thinks the total cost of an Amazon phone would be ~$150-170, and it would sell to carriers for $170. Amazon would make up the lost money through media sales.
For some comparison, HTC phones need to sell to carriers at $243 to generate a 30% gross margin, says Mahaney. Apple sells iPhones for over $600 to carriers.
This isn’t the first time we’ve heard about a possible Kindle phone. Earlier this spring a source told us that the phone plans are already under way. The phone is supposed to use a NFC chip and tie back to Amazon Payments. It will also use the same OS as the Kindle Fire and tie into Amazon’s daily deals service.
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