Amazon (NASDAQ:AMZN) recently made a splash into the tablet market with its new Kindle Fire. The move was seen as a way to challenge Apple (NASDAQ:AAPL), and even Barnes & Noble’s (NYSE:BKS) new NOOK tablet. Now, there is speculation that Amazon may be getting ready to enter the smartphone market.
According to Citigroup (NYSE:C) Investment Research, Amazon is likely to launch a smartphone in the fourth quarter of 2012. “We believe FIH is now jointly developing the phone with Amazon. However, we believe that Amazon will pay non-recurring engineering fees to FIH, but the device and multiple components will actually be manufactured by Hon Hai’s TMS business group (the same business group that makes Amazon’s e-reader and the 8.9-inch Amazon tablet). We believe the smartphone will adopt Texas Instrument’s (NYSE:TI) OMAP 4 processor and is very likely to adopt Qualcomm’s (NASDAQ:QCOM) dual mode 6-series standalone baseband given Qualcomm has been a longtime baseband supplier for Amazon’s e-reader.”
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Before changing Bandwagons, investors should consider the ongoing demand strength in Apple products. A Nelson survey finds that the Apple iPad is the most desired consumer electronic among kids ages 6-12 for this holiday season. The iPod Touch and iPhone came in second and third, respectively. The Apple iPad is also the most desired consumer electronic among kids 13 and older.
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