LONDON – Having achieved success with its Kindle and Kindle Fire e-readers, Amazon.com Inc. (Seattle, Wash.) has asked electronics manufacturing services company Foxconn to help it enter the smartphone market in 2012, according to a Taiwan Economic News report.
Foxconn (Tucheng, Taiwan), the world's largest EMS company is thought to employ more than 1 million people, mainly in mainland China where it has numerous plants consumer electronic equipment for companies including: Amazon, Apple, Cisco, Dell, Hewlett Packard, Nintendo, Nokia and Sony Ericsson. Much of Foxconn's success has come with that of Apple's iPhone smartphone and iPad tablet computer.
Amazon and Foxconn have formed a joint-design manufacturing company that is expected to produce an Amazon branded smartphone in the fourth quarter of 2012, according to the report, which referenced unnamed Citigroup Securities analysts as its sources.
Amazon's smartphone is likely to be based on the Omap 4430 processor from Texas Instruments and a dual-mode baseband chipset (HSPA+/CDMA EVDO) from Qualcomm, the report referenced the observers as saying.
As Omap 5, based on a dual-core ARM Cortex-A15 processor, is expected in the third quarter of 2012, the report said that the Amazon phone looks set to be targeting the middle of the smartphone market, rather than the high-end.
Amazon is likely to be aiming at a bill-of-materials cost for the phone of less than $100 for a phone with 8-megapixel camera, 4-inch touchscreen, the report said.
Although such a smartphone might cost $150 to $170 per unit to manufacture the report quoted the Citigroup Securities analysts as saying Amazon might choose to sell the phone at a discount. This has been the pricing strategy with the Kindle Fire under which Amazon seeks to get widespread acceptance of its terminals and make profits from the sale of products and application software.
It is a natural progression for Amazon to enter the mobile communication market when it already has Kindle and its new sibling 'Fire' with WiFi connectivity. But these are NOT the devices like HTC's or Samsung's smart mobile appliances which are much better architected for mobile comm plus surfing / reading / watching content.
But what is not clear from the article above is: how is Amazon getting mobile device design done? Outsourced? Foxconn as many above have pointed out is a contract manufacturer, may have staff with relevant design experience but utilizing that may not give any leverage to Amazon in IP or uniqueness!
Amazon's hope is to sell more eBooks or online video if customers use their device. Nonetheless, it is difficult to believe that Amazon would consider entering smartphone market so late. What would be the benefit over launching apps to various smartphones/ tablets platform? Will Amazon release its own Ultrabook?
This type of "technology transfer" is inevitable. The only thing that one can hope for is a 6 to 12 month head start. In particular are the various packaging technologies. I just attended that 2.5d 3d packaging conference and the various packaging houses are showing technologies that are coming in the 1 to 2 year time frame. Now instead of the foxes having to go and find the henhouse to invade, the hens are coming to the foxhouses...
Interesting to read of Amazon now considering to enter the mobile phone market.
I funny how a company that started selling things through the internet can now go to make their own mobile phone.
Interesting comments also by DrQuine and mark.
Though... Foxconn does provide manufacturing to a lot of companies... is this the first time Foxconn will make development work?
And yes, is also the first time I here somebody questioning the claim that Amazon is loosing money with the kindle Fire. Is there an official statement from Amazon?
why do people keep repeating this claim that the Fire is being sold under cost. there have been several teardowns, and no consensus on what Amazon's cost actually is. given that the tablet can certainly be used without recurring payments to Amazon, it simply makes no sense for Amazon to subsidize them. repeating the claim boils down to "Amazon is wasting money".
This would seem to be a recipe for a monumental lawsuit - especially if any leaks occur between development teams. What processes does Foxconn use to isolate competing development teams? In context, even the most innocent observations could provide critical competitive insights (how many touch screens are being ordered, the nature of subcontracting work being requested, even the appearance of new devices on the local WiFi network). It would also seem to fly in the face of current concerns regarding business continuity - even the competitors' operations are co-located!
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