Amazon to Compete Head On with Apple, Google

Amazon is believed to be developing its own smartphone that would directly compete with Google’s Android and Apple’s iPhone.

Industry sources said Foxconn International Holdings Ltd is working on the Amazon device. The retail giant is also believed to be acquiring different patents to cover its wireless technology and to help prevent infringement lawsuits.

Amazon’s smartphone would provide the company more elbow room to make money from digital products. The device would bolster revenues mainly generated by its digital movies, books and songs.

The Amazon smartphone is also expected to get a fair share of the advanced wireless handsets market. In just the first quarter of 2012, Apple and Samsung Electronics Co. have shopped close to 400 million smartphones and other mobile devices.

Amazon spokesman Drew Herdener declined to make any statement on the smartphone speculations. But according to Citigroup, Inc. analysts Mark Mahaney, Amazon would launch its smartphone in November of this year.

Amazon is also beefing up its patent expertise with the hiring of Matt Gordon. Gordon was Intellectual Ventures Management LLC’s senior director of acquisitions. He will now be patent acquisitions and investments general manager.

Intellectual Ventures Management owns close to 40,000 intellectual property assets. The company was founded by then Microsoft chief technology officer Nathan Myhrvold.

Having a stronger patent backing would help protect Amazon from infringement lawsuits. This year alone, Amazon was involved in at least five patent-related cases. Last year, Amazon figured in 20 cases.