Two unnamed sources told Bloomberg that Foxconn International Holdings is working with Seattle-based Amazon to produce a smartphone that will rival Apple's iPhone and handheld devices that run Google's Android operating system. In addition to the device, Amazon is reportedly scooping up patents that cover wireless technology to better defend itself against possible allegations of infringement.
According to the report, Amazon recently "beefed up its patent prowess" by hiring on Matt Gordon, the former senior director of acquisitions at Intellectual Ventures Management LLC, a company that was founded by former Microsoft Corp. Chief Technology Officer Nathan Myhrvold and currently owns more than 35,000 intellectual property assets. Gordon will reportedly take the role of general management for patent acquisitions and investments at Amazon.
Sources said that Amazon considered buying wireless patents from InterDigital Inc. before the company's June announcement that it would sell its assets to Intel for $375 million USD. Now Amazon is taking pitches and setting up briefings with other unnamed sellers.
Also just recently the online retail giant acquired 3D mapping startup company UpNext. The move seemingly pointed to possible GPS support in the next Kindle Fire tablets, rumored to be called the Kindle Fire HD (7-inch) and the Kindle Fire XL (10-inch), or the next generation after that. It also seemed to be an indication that Amazon wanted its own mapping client for a possible smartphone which would offer turn-by-turn directions.
News of a possible Amazon-based smartphone has been around for a while. It's the one device Amazon currently doesn't offer in its electronics portfolio, a device which would bolster its strategy of making money from digital downloads like music, videos, books, magazines and more. Technically Amazon already rakes in huge amounts of money through its Kindle app and its Amazon MP3 app for Android and iOS, but currently no smartphone is authorized to stream or download video purchased through Amazon.
Would an Amazon smartphone use the Android OS? Given its experience with Google's OS, it's very likely. Also a good candidate would be Mozilla's HTML5-based Firefox OS which is slated to launch next year, but Amazon already has a huge library of Android apps in its popular Appstore -- Amazon may not want to start over from scratch.
Drew Herdener, a spokesman for Amazon, declined to comment, Bloomberg said. After news of a possible smartphone on Friday morning, Amazon increased 0.6 percent to $228.30 at 9:44 a.m. in New York. Foxconn gained 3.7 percent in Hong Kong.