Ecosystem Ownage

Does Amazon Really Want to Build A Smartphone?

You get a phone! And you get a phone!
jeff bezos2 Does Amazon Really Want to Build A Smartphone?

"Should we just shrink it?"

Hard on the heels of last week’s Facebook phone rumors comes new smartphone pot-stirring on the part of Wired. The question: Why shouldn’t Amazon take its foothold in the tablet market and tackle smartphones? Uh, we can think of a couple of reasons.

This isn’t the first mention of an Amazon smartphone. Back in November, All Things D got hold of a note that predicted the device would be launched by the end of the year, based on backdoor intel (called channel checks) from Amazon’s Asian suppliers. The memo suggests the phone would cost $150 to $170 to build–and of course, Amazon has never been shy about cutting it close on margins. Now that it’s already May, Wired runs the pros and cons. The ability to sell on its own homepage is not to be underestimated as an advantage. ABI Research analyst  Aapo Markkanen–who calls a smartphone “a logical next step” for Amazon–points to the “lock-in effect” of the company’s content ecosystem:

If Amazon builds up a sizable customer base for its devices, and many of those customers find its content offerings appealing enough, then that would mean a tougher market environment for Apple, as well.

But it’s worth noting that the Android smartphone space is a whole different kettle of fish than the Android tablet space upon Amazon’s advent. There’s already a whole bunch of competitors fighting for position, and Amazon wouldn’t exactly be able to waltz in as the heir presumptive. Nor has Amazon’s relationship with app developers always been rosy, either.

All this follows yet another spate of ill-sourced speculation regarding Facebook’s long-rumored smartphone. DigitTimes claimed HTC is developing such a device with an eye to a Q3 launch, but there’s a good chance that’s utter nonsense.

Given all the rampant rumor-mongering, we can’t help but wonder what might be percolating in the minds of those behind “Newco,” Barnes & Noble’s nascent Microsoft-funded, Nook-making subsidiary. Let’s take another look at the kicker to yesterday’s press release:

Barnes & Noble and Microsoft have settled their patent litigation, and moving forward, Barnes & Noble and Newco will have a royalty-bearing license under Microsoft’s patents for its NOOK eReader and Tablet products. This paves the way for both companies to collaborate and reach a broader set of customers.

Just saying. 

Follow Kelly Faircloth on Twitter or via RSS. kfaircloth@observer.com