Amazon is building a phone, reports say (Updated)

Amazon PhoneIt built a tablet to compete with the iPad (sort of), and now there’s talk that Amazon is planning to launch a smartphone to go up against the iPhone.

A new report by WSJ states that Amazon is creating a new smartphone with an Asian manufacturer for production later this year or early 2013. It is believed that the screen size is between 4 and 5 inches, which is a common size range for modern smartphones.

According to a Bloomberg report last week, “people with knowledge of the matter” said that electronics manufacturer Foxconn is helping the e-commerce giant to build the device, which would also compete against the mass of Android-powered devices already on the market. Many readers will of course be aware that Taiwan-based Foxconn is also one of the primary producers of Apple’s iPhone and iPad devices.

These reports aren’t the first time talk has surfaced of an Amazon smartphone, and lend weight to the idea of the company launching such a device. We hear rumors all of the time, but we expect a mainstream news sites like Bloomberg and WSJ to ensure the reliability of their sources.

Last November, it was also suggested the Kindle Fire maker was planning to launch a phone some time this year, and Foxconn was cited as its manufacturing partner then as well.

Amazon is also reportedly acquiring patents which cover wireless-related technology, well aware of the murky waters it could find itself in if there’s any question of patent infringement further down the road. Apple and Samsung have over recent years been spending vast sums of money on lawsuits accusing each other of various infringements regarding their mobile devices, with two Samsung products currently banned from sale in the US. Amazon will not want to find itself in a similar situation.

If the company does launch a smartphone, its set up will mirror that of Apple’s with both a tablet and handset utilizing their respective online stores from which a ton of content – including books, music, apps, TV shows and movies – can be downloaded.

There’s no word on how much Amazon’s rumored phone might cost, but it’s easy to imagine it’ll be positioned at the low end of the market – like its tablet – sold at cost (or even at a loss) in order to drive sales of content from its online store.

Article originally published 7/05/2012

UPDATE 7/11/2012 by Jeffrey VC: WSJ has also reported that Amazon is working on a smartphone. I’ve added this rumor into Trevor’s story.