Amazon smartphone reportedly in production at Foxconn, launching mid-2013

Since its debut last year, the Kindle Fire has garnered quite a bit of attention in the tablet space. Despite Amazon’s reluctance to release actual sales numbers, there’s no doubt that the slate has made at least a small dent in Apple’s majority marketshare.

And now it looks like Amazon is ready to take on Apple and others in the smartphone space as well. A new report today adds to previous rumors that the online retailer is working on a handset, claiming it’s already in production, and set for launch next year…

Slashgear points to a new report from the Taiwan Economic News that says Amazon has tapped the ever-popular Foxconn to make its new smartphone. It’s said that the initial order is for around 5 million units, and production on the phone has already started.

“Foxconn International Holdings Ltd., an affiliate of Hon Hai Group, has allegedly manufactured a new smartphone model for Amazon on an exclusive basis, according to industry sources.

Some smartphone parts makers involved in the supply of Amazon’s new smartphone model, which is scheduled to be launched between the second quarter and the third quarter of 2013 at a unit price of US$100-200, said that Foxconn is expected to ship as many as five million units of the new device in the year, given the fact that Amazon has shown ambition to extend its business reach to the fast-growing market after succeeding in diversifying from e-books and readers to tablet PCs to drive its growth.”

Though we continue to label the ‘Kindle Phone’ as a rumor at this point, it wouldn’t surprise us in the least bit if Amazon released a handset next year. The retailer has quite an ecosystem with apps, games, music and movies. And the ‘Kindle’ brand is very strong.

Also, for what its worth, today’s story matches up with a previous report from The Wall Street Journal from back in July. The news outlet said then that Amazon was testing a handset with a display between 4-5-inches, and production would start later this year.

When it does hit, Amazon will certainly have its work cut out for it. The smartphone space, which is dominated by iPhones and Android devices, is an extremely tough industry — just ask Microsoft or RIM. I can’t wait, though, to see what they’ve cooked up.

What do you think, does an Amazon smartphone stand a chance in today’s aggressive smartphone space?