Rumor: Amazon developing its own smartphone

After the wild success of the Kindle Fire, Amazon wants to expand its horizons.

According to overseas manufacturing sources, the online retail giant has tapped Foxconn to help provide the components for what could be branded as a “Kindle Phone,” placing Amazon in an entirely new market.

The one problem with the smartphone market is that it is very much a market where in-store presence is still highly valued, so Amazon would need to set up shop in places like Best Buy right away.

The Kindle Fire has so many positive factors working in its favor. First, at $199, it’s cheap. It blows other offerings like the Xoom and Galaxy Tab out of the water.

Second, “Kindle” is an immensely recognizable brand and carries a lot of weight throughout the industry – again, something that names like “Xoom” don’t have.

And of course, because it’s Amazon, the Kindle Fire gets free unlimited publicity on the world’s largest online store.

It could bring a lot of those same factors to the table with a Kindle phone. The biggest issue with Android is fragmentation – you never know if an Android app will work on your particular phone. If there was a phone that was seen as “the” Android phone, though, it could be the model upon which all other Android handsets are built and help with that issue.

But this is all just hypothesis at this point. Amazon will be plenty busy with the Kindle Fire for some time to come.