Reports that Amazon is secretly working on a Kindle smartphone received fresh backing from an analyst who thinks it’s only ‘logical’.
In an email to Wired, Aapo Markkanen of ABI research said “a smartphone would be a logical next step for Amazon”, amid the re-emergence of rumours that Facebook is partnering with HTC to develop a fully branded handset for release later this year.
Markkaned believes Amazon’s wide portfolio of services gives it considerable leverage to keep consumers from straying towards rivals’ offerings.
“The lock-in effect of a great content ecosystem shouldn’t be under-estimated,” he said.
“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.”
The online giant is expected keep costs down by opting for a lower profit margin from hardware sales to get a higher return on investment from sales of digital content.
The strategy has worked wonders for its Kindle Fire tablet, which shifted more than five million units to-date despite the fact it has yet to go on sale outside the US.
If and when exactly the Kindle phone might finally land is as-yet unknown. However, according to Citigroup analyst Mark Mahaney, the retailer is already working on it with China’s Foxconn (which also makes iPhones for Apple) and is likely to launch in the fourth quarter.