Is Amazon developing smartphones? New reports say that the online retail giant, which has found hardware success with its Kindle tablet, is considering or in the process of doing just that.
Recent reports in the Financial Times and in Bloomberg News said the e-commerce behemoth is working with handset maker HTC to develop such a line of products.
On Wednesday, Bloomberg said Amazon had been in talks with HTC since at least June. Citing "two people familiar with the talks," it reported that no decision has been made about whether to proceed with the development of a product nor about a possible delivery schedule. It noted a key driver for the company is increasing the number of people who can directly access its Instant Video Service, which is also compatible with Apple's devices, connected TVs and computers.
The Financial Times also reported the HTC-Amazon connection, but its story, published Tuesday, indicated that product development was under way, as opposed to Bloomberg's take that only talks were happening.
The Times said there were three devices being discussed, and one is "at an advanced stage of development." It also cautioned that the timeline had been changing and Amazon had not yet committed to releasing that smartphone.
Amazon has only said that it had "no plans to offer a phone this year," which is not surprising since the holiday season is almost here. HTC has also declined to comment.
There have been rumors and reports for years that Amazon was entering the smartphone market, at least in part because it would seem to make sense as a complement to its Kindle tablet/e-reader line, would allow direct access to its huge inventory of content and would enable another mobile shopping tool for its store. The Kindle was developed at the company's secret design unit in California, and then made by contract manufacturers.
HTC has a history of designing and making devices for better-known brands, beginning with its history of working with Palm. Most recently, it worked with Facebook to create the HTC First, also known as the Facebook Phone, although that product has not been a success.
Ross Rubin, principal analyst at industry research firm Reticle Research, told us that Amazon's "move into the handset business would be a natural evolution of its content ecosystem," which also includes several smartphone apps for such functions as access to its music store and other shopping.
He also noted that an Amazon smartphone could allow the company to gain a greater foothold in areas where it has only dipped its toe. For instance, Amazon has a Price Check app, which allows smartphone users to a barcode on a product in a bricks-and-mortar store and then see if Amazon carries it for a lower price.
If Amazon does move forward with releasing a smartphone, Rubin said, a key question is whether it would act as the service provider or if it would contract with, say, a Verizon. Amazon already has an extensive subscription and customer service network to handle back office and customer management functions.