Rumors of an Amazon smartphone started the day the company launched its 7-inch Kindle Fire tablet, and on Tuesday The Wall Street Journal reported that the Internet retailer is working with component suppliers in Asia to test a smartphone.
Mass production of the device could begin later this year, the publication said, citing anonymous sources familiar with the matter.
Given Amazon's complete content ecosystem and cloud services, the company is one of the few with many of the pieces to the hardware puzzle already in place.
Still, it's quite a jump to go from eReaders and an Android-based Wi-Fi-only tablet to the highly competitive world of smartphones. Just ask RIM and Nokia.
Among OEMs, Apple devices running iOS and Samsung devices running Android control more than half of the total smartphone market.
Industry analyst Jeff Kagan acknowledged the steep hill ahead for any company hoping to get into the smartphone market, but said in reality it's still early days and there's a lot of the market still up for grabs.
"Amazon.com has much of what it takes to be successful. They have a growing customer base, a rich and disperse market, and the lead in the eBook reading marketplace with the Kindle and Kindle Fire," Kagan said in emailed comments.
Kagan said to succeed, Amazon will have to give consumers something entirely new.
"If they get the marketing right, then yes this could be the next big hit in wireless," Kagan said.
There are still a lot of holes in the Amazon smartphone rumors. No one knows for sure what operating system it would run. However, it's probably a good guess that the company would continue on with the modified Android strategy it used on the Kindle Fire.
If these rumors turn out to be true, Amazon will have plenty of company in the pool when it jumps.
An iPhone 5 is expected this fall. RIM is expected to launch its long-awaited BlackBerry 10 devices in January of 2013, and Nokia could launch new Windows 8 phones prior to the holidays.
And that's to say nothing about the continual onslaught of entries from Samsung and the rest of the Android OEMs.