Will Amazon Launch its own Branded Smartphone in 2012?

The Kindle Fire is proving how Amazon can give tough competition to other best tablet products like; the iPads and Galaxy Tab, other handheld tablets in the price segment and it’s not quite impossible that, Amazon will come out with a own branded smartphone anytime soon. According to Citigroup’s research team, Amazon will probably come with its own branded smartphone in market anytime Q4 of 2012.

Citigroup’s research team also believes FIH is now jointly developing the phone with Amazon, however 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. It’s the same business group who makes Amazon’s e-reader and the 8.9-inch Amazon tablet.

Here’re few words from Citigroup’s analyst “Mark Mahaney” as follows;

“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.”

Mahaney and his team guess that Amazon’s phone may cost it $150 to $170 to build, and it’s conceivable that the company will sell it for something close to that price: “For a normal brand like HTC, they need to price the product at US$243 to make 30% gross margin. If Amazon is actually willing to lose some money on the device, the price gap could be even bigger.”

It’s also expected that, the Amazon smartphone will carry a price tag of about US$243. Mahaney’s words doesn’t disclose whether the smartphone is using Google’s Android operating system or Microsoft OS. Well Amazon shouldn’t forgot Microsoft’s “OS royalty”, though Microsoft has recently been able to extract royalty payments from other Android hardware partners.

But I personally think, Amazon will definitely go for Android beyond the Microsoft’s “OS royalty”. For your kind information, Amazon is expected to release a tablet which will based on NVIDIA’s brand new quad-core Tegra 3 processor some time next year.