Amazon's smartphone delayed?

The e-tailer's latest hardware product may have hit a snag, according to rumors.

By TheStreet Staff Mar 12, 2013 12:22PM

Amazon.com logo copyright Spencer Platt, Getty Imagesthestreet logoBy Chris Ciaccia

Amazon (AMZN) is working on as many ways as possible to get consumers to buy stuff from it. One of those ways, however, may have hit a snag.

Digitimes cited sources from within Amazon's supply chain that the company's rumored smartphone may have encountered a setback. Plans were for Amazon to release the phone in the second quarter, but Amazon's manufacturing partner, Foxconn International Holdings, has run into some problems.

The phone is still going through its engineering verification test period, due in large part to issues related to its mobile platform.

Amazon is already selling multiple pieces of hardware, including the popular Kindle e-reader, as well as the Kindle Fire tablets. TheStreet reviewed Amazon's latest Kindle Fire tablet, the Kindle Fire HD in September 2012.

By expanding its hardware offerings, Amazon is going up against Apple (AAPL), Google (GOOG) and Samsung. Amazon is taking a different approach than Apple and Samsung as it relates to hardware. CEO Jeff Bezos has said in the past Amazon breaks even on the devices, making money only when a customer uses it to purchase something.

"Basically, we sell the hardware at our cost, so it is break even on the hardware," Bezos said in an interview with the BBC last year. "We're not trying to make money on the hardware."

Conversely, Apple and Samsung account for the majority of profits in the mobile device industry, with the iPhone and iPad, and Samsung's Galaxy line of smartphones and tablets.

Rumors of an Amazon smartphone were first heard last year (see TheStreet). An Amazon spokesman could not be immediately reached for comment for this story.

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