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Amazon Kindle Phone coming late 2012, says analyst

According to one analyst, the company is currently developing a Kindle Phone with a view to launching in the fourth quarter of 2012.

The Kindle Fire is just the tip of the iceberg when it comes to Amazon's mobile device ambitions. We reported last week that the Internet giant is currently thought to be developing a Kindle Fire smart phone, and now one analyst has now said that the company working on the phone expects it to be launched in the fourth quarter of 2012.

According to eWeek, Citigroup's Mark Mahaney told clients that Amazon is likely working with a Taipei-based company on a Kindle phone which will cost between $150 and $170 to produce and be available towards the end of next year.

This latest report is making it look increasingly likely that the rumours of a device costing around £100 could well be true. It would be very much in line with Amazon's current strategy of creating cheap devices on which it does not make much profit -- it recently emerged that Amazon actually makes something like a $2 loss on each Kindle Fire it sells.

Taking a similar approach with a mobile phone -- and relying on making a profit through the books, apps and other stuff the owner buys from you for consumption on the device -- would mean Amazon can offer an affordable alternative to pricey smart phones like the iPhone 4S and higher end Android blowers.

Speaking of Android, if Amazon were to release a phone the smart money would be on Google's OS as the platform: Amazon already uses it for the Kindle Fire, and it's free, which keeps development costs appropriately low.

However, another analyst believes that going down the cheap-shopping-phone route could be risky for Amazon. Current Analysis' Avi Greengart says, "Competing on price works for tablets where consumers pay the full price of the product. With phones, getting higher carrier subsidies is key -- consumers rarely see the true price of the phone. Besides, Samsung and Apple have far greater economies of scale, and some of their money-losing competitors are already effectively selling their devices below cost."

All this talk is interesting, not to say intriguing, but obviously until there's official confirmation that a Kindle Phone is imminent we would caution against getting too excited. And if it really is a year away, that confirmation probably won't come for a good while yet.