The latest rumor to spin off the mill isn’t regarding the mini iPad or iPhone 5, but rather, an unexpected competitor. Amazon, seemingly not satisfied with only having a presence in the tablet market, is on route to launching its own Android powered smartphone. Although it’s hardly surprising, I wasn’t expecting it. Amazon’s business is digital content: books, music, apps and movies, and having another hardware outlet to sell its multimedia opens up a brand new revenue stream for the Kindle makers.

Amazon.com Inc. (AMZN) is developing a smartphone that would vie with Apple Inc. (AAPL)’s iPhone and handheld devices that run Google Inc. (GOOG)’s Android operating system, two people with knowledge of the matter said.

One thing that will be interesting is what approach Amazon will take with the smartphone when bringing it to consumers. With the Kindle Fire selling at $200 (at a loss), will the smartphone take the same line? In theory that could mean a handset available for say $300 off-contract, or free with a two year plan. If so, it could become a very good value proposition. And, although the Fire’s performance is hardly stellar, its UI is a mile away from Android, and is incredibly user friendly and attractive.

What do you think? Would you get a Kindle phone if it was free on contract?

Via: Bloomberg