The Bloomberg report, sourcing “two people with knowledge of the matter”, believes Apple iOS manufacturer Foxconn is involved in private plans with Amazon to produce the smartphone that would “give Amazon a wider range of low-priced hardware devices that bolster its strategy of making money from digital books, songs and movies.”
A separate report from NPD DisplaySearch in CNet states that Amazon will release a second-generation Kindle Fire in July and go into production in August to produce three 7inch and one 8.9inch second-generation Kindle Fire tablets.
A smartphone would provide a new market for Amazon whose Kindle Fire tablet has sold five million units since its 2011 debut, taking 16.8 percent of the tablet market in 2011’s fourth quarter. But according to data analyst Asymco, the tablet has seen a significant decline in the first quarter of 2012.
Amazon is preparing itself for the ongoing patent disputes that have embroiled smartphone makers Apple, Samsung and HTC, the Bloomberg report states.
“Amazon is seeking to complement the smartphone strategy by acquiring patents that cover wireless technology and would help it defend against allegations of infringement,” Boomberg said.