To launch a Kindle smartphone, Amazon needs wireless patents and carriers

Amazon says it won't have any phone in 2013, and it won't be free

Amazon won't be ready to launch its much-anticipated Kindle smartphone until it builds up an ample portfolio of wireless-related patents and more relationships with mobile operators, an analyst said Monday.

The patent portfolio might have to come from buying another company, said Boris Metodiev, a Yankee Group analyst, via email, although he didn't offer any names for possible targets. Some vendors have licensed patents from others to the same ends.

Amazon "will be ready to launch the [Kindle] phone when it ... builds relationships with mobile operators and creates a solid portfolio of wireless/ smartphone patents," he said.

Amazon made it clear Monday it isn't ready to launch a smartphone in 2013, and if it does eventually launch a Kindle smartphone, it won't be free.

"We have no plans to offer a phone this year, and if we were to launch a phone in the future, it would not be free," a spokeswoman told Computerworld repeating a comment made to in the blog former Wall Street Journal reporters on Sunday. She offered no other details.

Amazon's comment came in response to an earlier report citing an unnamed source who said Amazon was considering making the long-expected Kindle smartphone available for free, apparently in a strategy to lure consumers to purchase more Amazon goods and services online.

Nobody in the industry doubts Amazon has a Kindle smartphone in the works, given the success of its low-cost Kindle tablets and Amazon's strategy of providing a Kindle reading app to run on any mobile platform, giving Amazon an e-commerce platform to the widest possible mobile audience.

Analysts said Amazon's denial of having a free phone in the works could have been a public relations attempt to quash any premature reports about plans to offer such a devices. But that wouldn't dismiss plans for a low-cost smartphone. In April, reports circulated about a Kindle smartphone with a 4.7-in. screen that would run a custom version of Android.

At that time, Yankee Group analyst Boris Metodiev and others said they expected Amazon to sell an inexpensive smartphone at a price well below the typical $200 price for a new smartphone with a two-year wireless contract.

On Monday, Metodiev said he expects the Kindle smartphone would cost about $100 and would mid-range-priced components compared to those in devices sold for $200 to $250.

The arrival of a Kindle smartphone would be late on the mobile scene. The first iPhone arrived six years ago, and competition has intensified with various Android vendors.

Amazon doesn't appear to be planning any strikingly unusual hardware with its expected smartphone, such as a super-high resolution camera or a fingerprint reader, several analysts said. A high-resolution display might be in the works, however.

Customers would buy a Kindle smartphone "for the same reasons people buy the Kindle tablets," Metodiev said. "They are good quality devices at low prices from a reputable brand name."

Amazon will launch a smartphone "eventually" following the success of its tablets, Metodiev added. "It is only logical that the company has decided to expand its range of products and dip its toes into the smartphone market as well."

With the Kindle Fire, Amazon moved seamlessly from e-readers to tablets, while a big screen smartphone would offer a transition from tablets to phones, he added.

A Kindle smartphone would be sold at low profit margins or none at all and would "provide better value for the money than its competitors," he added.

It isn't clear how Amazon would gain access to a solid patent portfolio, but some have suggested it could buy BlackBerry or license Blackberry's patents, similar to the way that Microsoft is paying to license Nokia patents while also buying Nokia's device business. Google bought Motorola a year ago partly for access to its rich patent portfolio.

"Nowadays, it seems impossible to survive in the mobile market without a [patent portfolio], Metodiev said.

Patrick Moorhead, an analyst at Moor Insights & Strategy, said there is room for Amazon to enter the smartphone market, particularly if it can work out a low or mid-priced model for cellular services.

This article, To launch a Kindle smartphone, Amazon needs wireless patents and carriers, was originally published at Computerworld.com.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

See more by Matt Hamblen on Computerworld.com.

Read more about smartphones in Computerworld's Smartphones Topic Center.

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