After The Kindle Fire, Amazon Will Challenge The iPhone With A 2012 Kindle Phone [Report]

After The Kindle Fire, Amazon Will Challenge The iPhone With A 2012 Kindle Phone [Report]

With the Kindle Fire, Amazon has proved that it is possible to compete with the iPad, at least in the budget tablet market. Will they try to take the crown from the iPhone’s head next with a so-called Kindle Phone? Yup, maybe!

According to AllThingsD, reporting Citigroup:

Based on our supply chain channel checks in Asia led by Kevin Chang, Citi’s Taipei-based hardware research analyst, we believe an Amazon Smartphone will be launched in 4Q12. Based on our supply chain check, we believe FIH is now jointly developing the phone with Amazon. However, we believe that Amazon will pay NRE (non-recurring engineering fees) to FIH but the device and multiple components will actually be manufactured by Hon Hai’s TMS business group (the same business group that makes Amazon’s E-reader and the 8.9” Amazon tablet). We believe the smartphone will adopt Texas Instrument’s OMAP 4 processor and is very likely to adopt QCOM’s dual mode 6-series standalone baseband given QCOM has been a long-time baseband supplier for Amazon’s E-reader.

Look, I’m going to go out on a limb here and say: bull. The Kindle Fire makes sense for Amazon because it is a way to easily put a portal in people’s hands that allows them to easily buy from the e-retailing giant’s huge library of digital content, especially Amazon’s Video and Kindle e-book services. But a phone? Not only would Amazon have to get into bed with carriers — a total headache — but smartphones aren’t great devices for watching video or reading. Plus, the competition is entrenched: Amazon can’t budge the iPhone, or even the likes of Samsung or HTC.

The reason the Kindle Fire was a revelation was because Amazon got in there early, releasing the first tablet since the iPad to be interesting on its own merits, not as a clone of a better device. They can’t do the same thing with a Kindle Phone. I doubt Amazon will be so stupid: they are a smart company, and if Amazon has proven anything, its that they don’t rush to market with new devices simply because everyone else is doing it. They aren’t a manufacturer primarily; they are a retailer. Any hardware they design must forward their retail operations significantly, or else, it’s pointless. A Kindle Phone just isn’t going to do that.

[via iDB]

  • Nikhilgolatkar

    That is Cool ,But how do you get such great Information cool even i own http://www.phoneblogcrazy.com but is less than you ,i follow you .One more thing to ask is iphone cheaper or Amazon Kindle

  • woodshow

    Kudos for not calling it an iPhone Killer.

  • Ed_Kel

    John, didn’t you write an article on how the Kindle Fire isn’t meant to compete with iPad and if anything, the Fire will just shake up an already broken Android tablet community?

    Maybe Amazon releases a phone that would ultimately compete directly with iPhone, but the Kindle Fire wasn’t ever meant to compete with iPad. And it is rather ignorant to think that a 7 inch, $300 tablet is in the same category as a 9.5 inch, $500+ category tablet.

    With that said, what in the hell does Amazon have that Microsoft and Google don’t? The competition has tried and the competition has failed to compete with iPhone. Regardless of if a phone has the name “Amazon” on it, it is and will always be a forged, unlicensed Linux kernel founded upon a fragmented pile of junk so often referred to as Android.

  • MacHead84

    Its like having a walmart brand phone….

  • Jordan Clay

    The Kindle Fire is meant to compete w/ the iPad at a certain level.  The two device do separate things, but most people will make a choice between the two.

    As for the 3rd paragraph,  consult the story “They aren’t a manufacturer primarily; they are a retailer.”   The tablet is meant to consume products from Amazon.  (Apps, Books, Movies, Magazines, Music)   It all comes from the Amazon ecosystem

  • Ed_Kel

    What’s next? Will you advocate to organize a boxing match between a lightweight and a heavyweight? The only buzz I have heard from my area is, you either have the money or you don’t. If your budget is only $300, then you have a choice between the Playbook or Fire. If your budget is $800, iPad or Galaxy. Don’t be naive, just because both are tablets doesn’t make them direct competition on any level. Raise the price of the Fire to iPad levels and the Kindle will falter like every other tablet.

    Google has books, music, apps too. But like Google, Amazon lacks what is most important, Apple’s ability to show what people want, not give them tools to do what they want. Regardless of ecosystem, Amazon will fall short of Apple just like the rest.

  • Im Pliny

    “Amazon has proved that it is possible to compete with the iPad” Not yet they haven’t. Let’s wait and see what Amazon profits look like in their next quarterly report.

  • S. Mulji

    I agree with you that the Kindle Fire is not a competitor to the iPad but I still believe the Fire will be very competitive.  

    The Kindle Fire is aimed at those who want a very portable, & content-consumption focused device.  by content I mean, ebooks, video, music, games and key apps like Facebook, Spotify, etc.  Add to the fact that it’s cheap helps the Kindle a lot as well.  I look at the Kindle Fire more of a competitor to the iPod Touch actually because for the most part they’re designed to do the same thing.

    As for the iPad, that represents the future for mainstream personal computing for Apple.  Apple is racing to make the iPad a replacement for your notebook & for some people their desktop computer.  Think of it a very mobile general purpose computer & for those looking for that kind of device will lean towards the iPad.

    So there’s definitely room (at least for now) for the devices to be successful because they’re not treading in each others’ territory.  But in the future, that doesn’t mean they won’t

    Just a couple of days ago, I was a podcast episode on The Verge & Nilay Patel made an really good analogy.  He said desktops are like trucks, large tablets like iPads are like cars, and small tablets like Kindles are like motorcycles (a play off of SJ’s comment at All Things D conference).

    There’s room for trucks, cars and motorcycles in the marketplace.  The last time I checked, the market for cars is a helluva lot bigger than that for trucks & motorcycles.

  • macgizmo

    Exactly what I was thinking. We’ve seen dozens of companies flood sales channels with inventory, only to have it not sell. HP comes to mind.

  • macgizmo

    My prediction: Buyer’s remorse for 3 out of every 5 Kindle Fire buyers who are not tech bloggers. Of course, those 3 will never admit it in public. 

    Amazon is effectively charging you $200 for the honor of buying things from Amazon that you could already do from the smartphone or computer you already own.

  • Ed_Kel

    I agree that it is more of an iPod competitor. I just hate how people misconstrue simple economics. Just because the Fire is a tablet does not make it a direct competitor. Will it take sales from iPad? Maybe; possibly. But in no way could someone hold both devices and compare them on any sort of intellectual level; it will always come down to dollars and cents. Again, If you have the cash for an iPad, you will get an iPad. If you don’t then the Fire will more than likely suffice, thus my point on the Kindle Fire being an Android shaker, not iPad. 

    Even if you bought a Kindle Fire, you will still dream of owning an iPad. That’s the type of hysteria that Apple’s competitors lack and is also one of the points I’m trying to make.

  • baby_Twitty

    What’s next? Target phone? BestBuy phone?

  • 300AShareMakesMeSmile

    It seems that almost any product that comes along recently that’s a smartphone, tablet or notebook is championed as the device that’s going to take down some Apple device.  In a sense, they’re saying that the Apple device is at the top and needs to be challenged and knocked down.  How did Apple devices get to the top if that’s the case?  They didn’t do it by luck.  It took a lot of advance planning and hard work.  Apple sells premium devices with very good customer service and that’s a well-known fact.  It’s easy enough to see that Apple is earning a huge amount of revenue from its products.

    I personally think it’s a pipe dream for some company that doesn’t have Apple’s economies of scale to build a better product at a cheaper price.  But the pundits believe this is somehow possible.  It would seem that if a consumer really wanted the best-built device, they’d just pony up the cash and buy the Apple product.  Why is a $200 Fire tablet being called an iPad competitor when it is plain to see it’s not in the iPad’s league of build-quality by a long-shot.  Will it take Apple iPad sales away.  Who knows?  The consumers that don’t have $499 were probably never going to buy an iPad. So, how does that eat into iPad sales.

    So, next up will be some Kindlephone running WP7.  Amazon is going to try to use some smoke and mirrors and a low price to gain smartphone market share.  It will again be mentioned that the Kindlephone is an iPhone challenger.  Why an iPhone challenger?  At the price range it will be introduced it will be certainly more like an Android smartphone challenger.  Will a Kindlephone harm iPhone sales?  Unlikely.  WP7 smartphones at this point compete at a lower point than Android smartphones.  I believe that Amazon will increase sales of WP7 smartphones, but so what.  How does that harm iPhone sales.  It shouldn’t.  I can imagine the incentive Amazon will be offering is that any content on the Kindle product line and stored in the cloud can be shared with the Kindlephone.  Amazon is building its own little walled garden ecosystem but iOS’s ecosystem is magnitudes larger in size.  So, again how does this impact iPhone sales?  It shouldn’t.

    I think you either want an Apple product or you don’t and those that do won’t settle for less unless they absolutely can’t afford it.  Apple has already set its product’s cost value based on their internal operating margin goals and that’s who they’re most concerned in reaching.  Apple isn’t interested in chasing market share without profits, so it doesn’t matter if they don’t reach all consumers.

    Let’s just say that Amazon will introduce its own smartphone and leave it at that.  Who buys it is left up to the consumer’s discretion.  What it will challenge will be determined when it goes on sale.

  • S. Mulji

    I agree with the basic gist of your comment.  Only thing I might add is whether a person buys a kindle or not , or buys one instead of an iPad really boils down to use case, of which there are two

    1.  If you’re looking for a tablet strictly to consume content such as video, music, ebooks, email, facebook, twitter, etc.  Then a Kindle, especially at $199, is an excellent choice.  In this use case scenario, I can see Kindles taking away sales from iPads, not for everyone but definitely for many people.

    2.  If you’re looking for a tablet to use as a  general purpose computer or to potentially replace your laptop or desktop, then the iPad is your best choice right now; definitely much better than a Kindle Fire.  So when you take this into perspective, $499 for an iPad is not that expensive.

    But overall I agree the Kindle does not compete & is not in the same league as an iPad & that’s the problem with a lot of the blogs out there.  They’re comparing apples to oranges.

  • Shameer Mulji

    If you believe in any of the rumors on the blogosphere, Amazon are selling these devices at break-even or just below.  They’re banking on making up the profit on content sales or reduced component costs (over the long-term).  It’s the game console business model. Here’s a link that may interest you;

    http://www.macobserver.com/tmo

  • John Branham

    …. won’t happen. it just won’t. LOL.

    The kindle fire isn’t even in the same category as the iPad… And like apple said, they are happy for the kindle fire coming out because it will just disorganize the android App Store and the platform itself. Same goes for this new phone… I hope they don’t even try. A phone…. from a company that focuses on book sales/reading…..

    No.

  • Ed_Kel

    Your name originally had me thinking you were a spammer.

  • Alfiejr

    the new Fire is a V.1 prototype being sold to several million suckers by Amazon thanks to massive media hype. it has potential to open up a new low-price market segment, but this model – both hardware and software – is badly flawed. i expect a much improved Fire 2 next year.

    but any talk of an Amazon phone is even more hype BS. you can arleady get a “free” Android phone that can do more, today, and can add an Amazon app to it for scanning bar codes etc. what would be the point?

About the author

John BrownleeJohn Brownlee is a Contributing Editor. He has also written for Wired, Playboy, Boing Boing, Popular Mechanics, VentureBeat, and Gizmodo. He lives in Boston with his wife and two parakeets. You can follow him here on Twitter.

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