Amazon’s Smartphone Faces Uphill Battle Versus Apple’s iPhone

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Amazon's Smartphone Faces Uphill Battle Versus Apple's iPhone

These days it seems that every company is creating their own smartphone. The  most recent rumor involves, Inc. (NASDAQ:AMZN).

Bloomberg reports that Amazon is working with Foxconn to create their own smartphone in hopes to compete with the likes of Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG). Their news comes from an unnamed source. The online store is also reportedly fixing their portfolio of wireless technology patents.

Just last November, analysts from Citigroup Inc. (NYSE:C) claimed that Amazon was planning to create their first phone with Foxconn International Holdings Limited (HKG:2038) that would be released during the 4th quarter of 2012.

David Conroy, CNET executive editor, believes Amazon will release their smartphone, “I think it’s only a matter of time before you see a Kindle smartphone; ultimately, Jeff Bezos knows that his company is going to have to compete directly against the iPhone if he wants Amazon to be Apple — or even beat it.”

It’s also rumored that later on this month, Amazon will release their second generation Kindle Fire, which is poised to compete with the iPad 3 and Nexus 7.

Everyone knows that Amazon is successful at many things including online retail and the ebook business, but are they ready to conquer the technology industry? Their Kindle e-readers and Kindle Fire tablets are undeniably successful sellers but creating a Kindle phone may be a questionable move. Apple earns high margins on their phones, but the same cannot be said of Amazon’s profit margins. On the other hand, Google Inc (NASDAQ:GOOG)’s Nexus 7  is expected to break-even.

As I’ve said before, it’s hard to compete with Apple. They have pretty much set the industry standards for modern technology. Their products have become a household name, and for people who want premium technology, Apple wins hands down. This isn’t too completely write-off Amazon’s rumored phone. Although there is not a whole lot of information about it right now, I think it’s got potential to be good budget smartphone much like how their Kindle Fire is an excellent tablet alternative.

My only wish for this phone is that it will have a solid camera with at least 5 MP. It is only important to find out what the pricing of the phone will be. Since the launch of the phone is still unconfirmed, prices are not yet known. Price it too high and customers might opt for alternatives. Price it too low, and Amazon will not be making a decent profit off of the phone.

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