Amazon.com, Inc. (NASDAQ:AMZN) has tasted success in the tablet market. Its Kindle Fire tablet is selling like hotcakes. The online retailer is now reportedly planning to delve into the smartphone industry. Sources close to the development told The Information that the Jeff Bezos-led company plans to launch its first smartphone this year. The device is likely to be launched in multiple markets across North America, Europe and Asia.
Amazon likely to hire HTC to manufacture Aria
Last spring, Amazon.com, Inc. (NASDAQ:AMZN) officials held talks with potential hardware partners. They also discussed possible strategies for European and Chinese markets. Another source said that the discussions also involved Latin America. The smartphone, code named Project Aria, is likely to be a mid- or low-end device. Amazon cannot immediately take the risk of launching a high-end smartphone, a market dominated by Apple Inc. (NASDAQ:AAPL) and Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930).
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Amazon.com, Inc. (NASDAQ:AMZN) has negotiated deals with several U.S. telecom operators to launch its smartphone. A few months ago, there were reports that the Seattle-based company would hire Taiwanese smartphone maker HTC to manufacture its devices. HTC might not be interested in producing smartphones for Amazon after two of its Facebook Inc (NASDAQ:FB)-centric device failed miserably.
Content delivery a big challenge before Amazon
A big dilemma before Amazon.com, Inc. (NASDAQ:AMZN) is that, like its Kindle tablets, the smartphones might face distribution issues in international markets. Kindle is still not available in many countries. And users can’t buy its ebooks officially. Amazon wants to sell its Aria smartphone in developing countries as well. But providing content in those countries is still not possible. That’s because Amazon doesn’t have necessary licenses in many emerging markets to deliver the same content it offers to U.S. consumers.
The online retail giant usually sells its devices cheap, and makes money by offering content like TV shows, movies and music. That’s why Kindle tablets are so affordable. If it doesn’t have the ability to deliver content in emerging countries, Amazon.com, Inc. (NASDAQ:AMZN) might have to reconsider its strategy.
Amazon.com, Inc. (NASDAQ:AMZN) shares rose 0.74% to $374.25 at 10:52 AM EDT.