Amazon to release Smartphone?
The rumour that Amazon has is working on their own version of a smartphone has been doing the rounds for a week or so now; unknown sources reported to be manufacturing the upcoming handset have said that production is well underway.
However, in such a competitive market, and with the disappointing sales of the Kindle Fire, does Amazon really stand a chance of taking on the big project of mobile technology? The big competitors they would have to deal with would be of course the iPhone and the Samsung Galaxy SIII.
Facebook emerge in mobile market?
Considering that Facebook are also rumoured to be entering the mobile market with the 'Buffy' project apparently well underway, Amazon will certainly have their work cut out and it's ambitious to think that they can compete with the more established mobile manufacturers just in terms of consumer trust.
The Facebook phone is thought to be based on the Android operating system with social aspects embedded firmly into the OS so that it really comes out to be a truly 'social' phone. However, Amazon doesn't have this advantage, although they do have an OS already on the table which the Kindle Fire uses.
For either of these companies, one of the most difficult aspects is the manufacturing process as they have never been involved in bringing out hardware devices in the past. Of course, Amazon has Kindle but these (apart from Fire) are pretty basic devices and don't have the power or capability of a smartphone.
This has brought up speculation that Facebook could buy the handset aspect from RIM so it stands to reason that Amazon could also consider this, although if the unknown source says it's already in manufacturing then it would seem unlikely.
It's also thought that Amazon are to launch further tablet devices, so despite the drop-off in sales for the Fire, this would suggest that the company is looking to further develop their eBooks and apps ecosystem to replace more traditional products such as physical DVDs and books.
"Amazon will keep working on the path of providing mobile devices and tablet devices," Giordano Contestabile, an executive at PopCap games told Reuters. "We're all waiting," he added.
Amazon's Kindle Fire overview
Despite the Fire not doing quite well as expected as it was thought to be a competitor to the Apple iPad at launch, Amazon has seen a rise of 3% in video sales since the device came out in September. Music download also increased by 1% according to a study by NDP Group.
Amazon has yet to confirm any of the rumours, but some newly hired employees have hinted at bigger things to come – but does this mean that the internet retail giant will have any impact?
Smartphone domination at present
Currently, Samsung and Apple have a joint share of 53% of the smartphone market and Samsung is edging ahead since the launch of the luscious Galaxy SIII. Other manufacturers are struggling to gain profitability for their efforts and RIM, the makers of BlackBerry are in serious trouble right now.
It seems that HTC are also struggling as they have seen sales fall both annually and sequentially, despite the fact that the smartphone market overall continues to grow at a rapid pace.
This would suggest that it's not a great time for new players to enter the market, especially if they rely on their own app ecosystem as both Android and Apple are well established and the leaders in the app market with many of these apps being cross-functional on an iPad or Android tablet.
At the moment, Samsung leads the market with a 29.1% share in the first quarter of 2012 and their smartphones are making 45% of their worldwide sales. Apple is slightly behind with 24.2%, whilst Nokia, once a world leader, are pushed down to a 14.4% slice of the smartphone pie.
Nokia also suffered losses in the last quarter which would suggest that a shift in the market is really placing Apple and Samsung on top and looks likely to keep them there, if not would increase the overall market share they currently enjoy.
Taking all of this into account, it's hard to see where an Amazon smartphone will fit in; whilst they brought out the Fire at a low price in order to encourage users to purchase apps and eBooks, this may not be enough to make the production of a handset worthwhile.
However, one thing is for sure, Amazon has been a big internet player for sometime now and whilst it's unlikely that they will seriously compete with Apple or Samsung, they must have a long term plan in place to deal with how they will profit from the production of a new device.
Author description: Kerry Butters is contributing this article on behalf of Mobile Broadband Genie, the consumer comparison site for all broadband products.