Amazon looking to develop smartphone to compete with the iPhone

Looking to expand their hardware offerings, Amazon is reportedly developing its own smartphone to compete with the iPhone and other Android based handsets

Well this is certainly an interesting piece of news - Amazon is reportedly looking to build a phone to compete with Apple and other Android-based handset manufacturers. Bloomberg reported this past Friday that the world's largest online retailer is currently in the midst of developing a smartphone set to be manufactured by, who else, Foxconn.

Amazon is seeking to complement the smartphone strategy by acquiring patents that cover wireless technology and would help it defend against allegations of infringement, other people with knowledge of the matter said.

A smartphone would give Amazon a wider range of low-priced hardware devices that bolster its strategy of making money from digital books, songs and movies.

In many ways, Amazon getting into the smartphone business makes a whole lot of sense. Amazon's strategy of doling out hardware and generating profits later on via Amazon Prime subscriptions and general content purchases seems to be doing well when it comes to the Kindle Fire, so why not extend that strategy into the smartphone realm?

Besides, with all the media content - whether it be music, movies, apps etc. - people are buying these days, why wouldn't Amazon want a piece of that pie given that they're uniquely positioned to compete with Apple's iTunes in a way that Google still can't (though the folks in Mountain View are definitely making a lot of headway in that regard).

The question, though, is if Amazon has the expertise to deliver a compelling smartphone that can really stand out from an already overcrowded marketplace.

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