With no way of encouraging shoppers to buy more in either the physical or digital world, Amazon would be mad to get into the mobile market, says silicon.com’s Jo Best.

If reports are to be believed, then Amazon is working on making a mobile phone. If it does make the device, it’ll be sold for around $150 – near cost price. If the phone does get released, it’ll be out at the end of next year. If the device ever sees the light of day, it’ll be a continuation of the strategy Amazon kicked off with the Kindle Fire tablet.

Started by an analyst’s report, this rumour has been seized on and dissected in great detail. How will it work? Where will it go? What will it do?

Of course, the most pertinent question – is this even really likely? – has been relegated to the Vauxhall Conference of discussion.

Amazon Kindle Fire

Is Amazon about to press Fire on a Kindle phone?Photo: Amazon

Good luck adding the Amazon Kindle phone to next year’s Christmas list – I just don’t see mobile as a market Amazon will want or need to get into.

Those who fancy the Kindle phone point to its supposed predecessor, the Kindle Fire tablet, as a sign of its likelihood. While the sale of the Fire brings Amazon no profit, and potentially even generates a loss, the tablet is expected to contribute to Amazon’s bottom line through its close ties with the wider Amazon ecosystem.

If you have a Kindle Fire, the conventional wisdom goes, you’re going to buy all sorts of goods and services from the company as a result. Of course, how successful this strategy will be is not yet known – the Fire only started shipping last week.

The Fire entices you to shop with Amazon in both the digital and physical worlds. Digital: the Fire is designed as a media-consumption device – it has a large colour touchscreen, meant for you to watch your Amazon-bought movies on and read your Amazon-bought books on. Physical: the browser-sporting, wi-fi-connected Fire comes with Amazon Prime as standard, meaning you can be plugged into Amazon’s consumerist paradise and order a delivery for tomorrow whenever and wherever you are with a few taps of the touchscreen.

Can the Kindle phone do the same? It’s unlikely.

Any Kindle phone won’t have the same advantages for media consumption. Smaller screen devices are best suited to what is cringingly called ‘media snacking’ – the consumption of short clips and text snippets. They are for reading articles and watching three-minute videos, not for watching a full-length movie or for reading War and Peace.

If the Kindle phone is unlikely to contribute to Amazon’s sales of digital films or books, can it have a part to play in bolstering physical sales instead?

Everyone I know, regardless of their income and almost regardless of their age, has a phone. Phones are generic hardware, a necessity rather than a nice-to-have. The same cannot be said of tablets.

By their very act of purchasing the tablet, Kindle Fire buyers have shown themselves to have…

…money to spare – they have come forward and identified themselves to Amazon as a disposable-cash demographic. Tablets are niceties, supplemental devices for tech-savvy consumers with money to burn. Sure, the Kindle Fire is cheaper than most of its tablet rivals, but its $199 price tag is still a fair whack to spend on a device you don’t need.

By bringing out a phone, Amazon would be aiming a blunderbuss at a market it has previously focused lasers on – wildly targeting everyone in the hope of catching some cash-rich consumers in the process, rather than just selling to those who’ve shown they have cash to spare.

Given a Kindle phone would be sold at near-cost price, it would make Amazon no money on the hardware itself. And given phone owners are not the same cash-rich bunch as tablet owners, there is no guarantee the device will lead to subsequent Amazon purchases in the same way the company hopes the Fire will.

The supposed Kindle phone also begs the question, why make a mobile device when mobile apps do the job just as well and necessitate a far smaller outlay for both Amazon and the consumer?

If the fabled price point of $150 is true, the Kindle phone won’t be a high-end device, able to take advantage of the latest whizz-bang hardware capabilities to ease the shopping experience.

Instead, it will have to rely on software to do that. Amazon would be mad to build a whole mobile platform for that reason -mobile’s graveyard is littered with the corpses of failed OSes – so presumably Amazon will have to mod Android or build an app or suite of apps. In which case, why not do that anyway and skip the device-building altogether?

It’s also worth considering the relative state of the tablet market and the mobile market when assessing the relative likelihood of a Kindle phone. The tablet market is up for grabs – killer apps and usage models are still ripe for discovery. The mobile market is mature, highly competitive and crowded with low-end devices.

Far more likely these rumours stem from Amazon working on a smaller tablet, rather than a phone.

Amazon is known for being a canny operator. I’d be surprised if it were to make a slip-up on the scale of getting into the mobile business.

Want a different point of view? Read silicon.com’s Steve Ranger on why Amazon should get into the smartphone market here.

And what do you think? What would make you buy an Amazon smartphone? Let us know by posting a comment below.