Is Amazon building a Kindle phone? The case against

Amazon isn't that daft... 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'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.