Stories claiming that the online retailer is about to move into the smartphone market first emerged in November when Foxconn, the company that assembles Apple's iPhones and iPads, claimed it had won the contract to build phones for Amazon and that they were scheduled for launch in summer 2013.
Amazon has experienced great success in the tablet market since it launched the Kindle Fire in 2011. The latest industry estimates (Amazon never publishes sales figures) rank it as the world's second most popular tablet behind the iPad. The company sees tablets as a way of selling content to users and while it has also launched a suite of apps so that Android and Apple smartphone owners can also buy its content, moving wholeheartedly into the smartphone market might prove to be a business masterstroke as the company will no doubt offer a device that's feature-packed and that is sold at cost, or even at a loss.
However, the phone is more than likely to run Amazon's own operating system, which is based on but is incompatible with Android, and it's not clear whether the existing smartphone market has room for yet another operating system.