Amazon Working on a Smartphone, Claims Citigroup

Amazon recently entered tablet segment, clinic and it looks like the e-commerce giant is not content yet. Citibank has claimed that Amazon is now looking to enter smartphone market. However, nurse it seems that Amazon is deliberately positioning itself in the mid and low tier market. Just like its tablet, drugs even Amazon smartphone is likely to be priced conservatively.

The phone will use Texas Instrument OMAP 4 processor and Qualcomm chip. The company’s Kindle Fire also uses Texas Instrument processor. Citibank claims that the components cost will be in the vicinity of $100 and the total cost will be in the range of $150 to $170. The company is also likely to sacrifice its margins in order to ensure low price point. Amazon has adopted the similar strategy for its tablet, Kindle Fire, as well. Industry experts claim that the tablet costs $202 to the internet seller, whereas the price of the tablet has been set at $199. Similarly, its $79 Kindle e-book reader costs $84.

Back to smartphone, Citigroup analyst said, “With the clear success of the Kindle e-reader over the past three years, and Kindle Fire possibly succeeding in the low-priced tablet market, we view this as the next logical step for Amazon.  We continue to believe Amazon has now set its eyes on the mobile (and tablet) media and product consumption frontier.” The company is likely to make up the initial losses by selling more digital content.

The phone is likely to hit the market in the last quarter of next year.



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