Amazon Phone for 2012 Holiday Season?

Amazon (NASDAQ: AMZN ) is gearing up for an absolutely goliath holiday season.
The National Retail Federation is predicting that online retail sales this
holiday will grow 15% over the same period in 2010, when holiday sales online
came to a whopping $36.4 billion. Considering that Amazon accounts for 20% of
all online retail visits , the company should have a very green Christmas
indeed. Leading the charge this year is Amazons new $200 tablet, the Kindle
Fire. Amazon is expected to sell 5 million Kindle Fires before the year is out,
cutting into Apple s (NASDAQ: AAPL ) lucrative iPad market. Exciting stuff, but
for Amazon, the 2011 holiday season is already old news, and the company instead
has its cross-hairs settled over Apple for Christmas 2012. Of course, Amazon
also will be gunning for Microsoft (NASDAQ: MSFT ), Research in Motion (NASDAQ:
RIMM ), Nokia (NYSE: NOK ), Samsung (PINK: SSNLF ) and scads of other companies.
Thats right: Amazons making a smartphone. At least, thats what Citigroup
analysts Mark Mahaney and Kevin Chang believe Amazon is planning for next year.
Based on information from sources within Amazons supply chain in Asia, the two
believe Amazon will release a low-cost smartphone in the $150 to $170 range,
taking a slight loss on the device as it is doing with the Kindle Fire. Chang
and Mahaney said Amazon is developing the phone with Foxconn International
Holdings. Given that the Kindle Fire utilizes Google s (NASDAQ: GOOG ) Android
operating system and Amazon app development is on that platform, it is likely
that the Amazon phone also will be an Android device. Mahaneys track record in
prognosticating Amazons plans is decent, as he successfully predicted the
release of Amazons $79 Kindle in May. An Amazon smartphone certainly seems in
line with the companys expansion as a gadget maker. Amazon is working hard to
establish not just a hardware presence with products like Kindle Fire, but a
competitive mobile commerce ecosystem comparable to Apples iTunes. In addition
to the Amazon Appstore, long-standing digital music store and Kindle e-book
store, Amazon is pushing its Amazon Prime premium subscription service as a
Netflix (NASDAQ: NFLX ) competitor with streaming video. All Kindle Fire buyers
get a free 30-day trial membership to Amazon Prime, which should grow the
subscriber base during the tablets release window. And for every 1 million new
Amazon Prime subscribers, the companys total revenue grows 1.5% . An Amazon
mobile phone backed by the companys brand and this ecosystem of services could
change the whole mobile phone market. No one owns the holiday season quite like
Amazon. The companys sales absolutely crushed Christmas 2010. On Cyber Monday
2010, Amazon sold 13.7 million individual products across all of its categories.
Thats 158 items per second ! Its Kindle e-reader was the hot ticket last year,
and while Amazon didnt disclose full Kindle sales, it did reveal the device
became its best-selling product ever at the time, outdoing J.K. Rowlings novel
Harry Potter and the Deathly Hallows . And that book sold 15 million copies
worldwide on its first day. With Kindle Fire, the company is hoping to dominate
this years holiday season. The Amazon phone should only keep the companys
winning streak running in 2012. As of this writing, Anthony John Agnello did not
own a position in any of the stocks named here. Follow him on Twitter at