Rumour: KindlePhone in 2012?

Wall Street Journal subsidiary All Things D believes that we could see an Amazon KindlePhone next year, saying ‘Citigroup’s research department [says] it could have its own phone.’

The source is analyst Mark Mahanet, who said, ‘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.’

The rumour suggests that a Texas Instruments OMAP 4 processor and QualComm dual-mode 6-series cellular network controller will be used, given that QualComm has supplied similar chips to Amazon for its eBook readers.

There’s a detail in the Citigroup report that, because an ‘OS royalty’ has to be paid to Microsoft, the smartphone will be based on Android. This is no surprise given that the Kindle Fire was also based on Android.

The device is ‘guessed’ by Mahany and his team to cost between $150 and $170 to build and ‘it’s conceivable that the company will sell it for something close to that price.’ Typically, All Things D says, smartphones are sold with a 30 per cent gross margin but ‘if Amazon is actually willing to lose some money on the device, the price gap could be even bigger.’

There seems to be no evidence from Citigroup’s research team to back up the assertion that Amazon would sell the smartphone at cost or a loss.

Intrigued by an Amazon phone, or concerned that it’ll tempt you into spending way too much on cool stuff? Let us know in the fourm.