Rumor: Amazon might build a smartphone to rival iPhone

Ready for today's craziest rumor? Yeah, if a bunch of hardware research analysts from Taiwan are to be believed, Amazon's stockpiling supplies to build a Kindle smartphone to either fight the almighty iPhone or make a killing on Android.

It goes without warning that "supply chain checks" need to be taken with a huge grain of salt because looking back, those "checks" sure worked really well with the iPhone 5, iPhone 4S in the last year. The claim that Amazon's Kindle Phone is coming in 2012 is from Citigroup. I'm calling BS on it.

Why would Amazon build a smartphone? Well, for one thing, Amazon's CEO Jeff Bezos is hailed as the next Steve Jobs — the next great visionary who just understands the importance of an ecosystem of hardware backed by strong software (Kindle Fire, I'm looking right in your eyes). That might be true and Bezos might understand business a little better than most CEOs, but I don't think Amazon will bite off more than it can chew.

The smartphone space is crowded enough with iPhones, Androids, BlackBerries and Windows Phone 7 running around. Look how well webOS worked...

A tablet works for Amazon because it sells tons of digital books, movies, apps — you name it. As Barnes & Noble's CEO William Lynch said at last week's Nook Tablet unveil event, the Fire is "vending machine for Amazon's services." Lynch hit it right on the mark. Amazon's losing money on every Fire just to earn it all back in digital sales and they're perfectly fine with it.

But a smartphone is an entirely different ball game. There are carriers blocking the way who want bloatware on the phone, Android fragmentation, subsidiary pricing, contracts, and all sorts of icky stuff involving who gets what share of the sales pie and whatnot.

Selling a smartphone isn't as easy-peasy as selling a tablet or e-reader, directly to the consumer. The only way I can see an Amazon smartphone succeeding is if Bezos manages to wrangle the carriers and make them bend to his phone as Jobs did with the iPhone.

Then Amazon would be able to sell a device that isn't bogged down by carrier garbage. And honestly, ask yourself this, because Amazon loves screensaver ads for its Kindles, what carrier would let them plaster their ads all over a phone? No carrier.

Via AllThingsD

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