Amazon 'planning iPhone rival'
AMAZON.COM is developing a smartphone that would vie with Apple's iPhone and handheld devices that run Google’s Android operating system, two people with knowledge of the matter said.
Sources claim Amazon is already aggressively acquiring wireless patents and working Foxconn, the maker of the iPhone.
Although the site, made its name as an online book shop but has since expanded to make its own devices such as the Kindle ereader and the Kindle Fire tablet. A phone would allow Amazon to continue its strategy of selling the devices through which users view the films, books and music it also sells. Samsung and Apple shipped the bulk of the 398.4 million smartphones sold in the first quarter of 2012 alone, according to analysts IDC, and Amazon is keen to capture a slice of that growing market.
Commentators have been speculating for months that Amazon is planning a new device, but details have been limited. Amazon declined to comment.
Last year, Citigroup speculated that Amazon could sell its smartphone, reckoned to cost between $150 and $170 to build, at a loss as it does with the Kindle Fire. “For a normal brand like HTC, they need to price the product at $243 to make 30 per cent gross margin,” a research note said. “If Amazon is actually willing to lose some money on the device, the price gap could be even bigger.”
Bloomberg reported that Amazon considered buying patents from InterDigital that were later acquired by Intel, and that it is currently considering other options as well. Amazon has recently hired Matt Gordon, formerly senior director of acquisitions at Intellectual Ventures Management, the company that was founded by former Microsoft Chief Technology Officer Nathan Myhrvold and owns more than 35,000 intellectual property assets. Gordon will be general manager for patent acquisitions and investments at Amazon, according to his profile on LinkedIn.
Adding patents would help Amazon protect itself against lawsuits alleging illegal use of technology. Amazon has been involved in five patent-related cases this year, and 20 cases last year, according to data compiled by Bloomberg.
Demand for mobile patents has increased, as shown recently by Google’s $12.5 billion acquisition of Motorola Mobility Holdings Inc. and its thousands of patents, which closed this year.