The Financial times (FT) came up with a report (link: subscription required) that suggested that Amazon was partnering with HTC to build Amazon smartphones which are supposedly the ones using the new Amazon 3D user interface as mentioned in our previous coverage. According to FT, the smartphones have reached an “advanced” stage of development, but they don’t believe that a 2013 launch will happen.
Amazon devices are designed to be “good enough” and easy enough to accelerate the growth of Amazon’s online business. For that reason, profit margins are not really a priority and Amazon can undercut Apple’s pricing by a significant margins. The main drawback of Amazon mobile products is that they are not using the regular Android OS, and connect to the Amazon store. Of course, power users can always hack or side load content, but overall the Google Nexus 7 tablet is a formidable competitor to Amazon. Incidentally, Google doesn’t really care about hardware profits either.
Nevertheless, the Amazon mobile products have had a substantial share of success, so any move from the online giant is not to be underestimated. If true, this deal could mean a great deal to HTC in terms of product volume, but it’s not clear what kind of profits HTC would get out of this. Developing products is also a source of distraction and it dilutes the human resources, so the consequences on the entire product line are difficult to predict and the net gains hard to estimate. We trust that HTC did what was best for its future.