NEW YORK (TheStreet) -- Amazon (Stock Quote: AMZN) is poised to launch its own smartphone by holiday 2012, according to an analyst.
"Based on our supply chain check, we believe FIH is now jointly developing the phone with Amazon," Citigroup analyst Mark Mahaney wrote in a note. "However, we believe that Amazon will pay NRE [non-recurring engineering fees] to FIH but the device and multiple components will actually be manufactured by Hon Hai's TMS business group (the same business group that makes Amazon's e-reader and the 8.9-inch Amazon tablet."
Mahaney said that the smartphone will likely adopt Texas Instruments' (Stock Quote: TXN) OMAP 4 processor and Qualcomm's (Stock Quote: QCOM) dual-mode, 6-series standalone baseband.
Following Amazon's launch of its Kindle Fire tablet, Wall Street was buzzing about what's next for the e-commerce giant. A smartphone would further narrow the gap between Amazon and Apple (Stock Quote: AAPL).
"With the clear success of the Kindle e-reader over the past three years and the Kindle Fire possibly succeeding in the low-priced tablet market, we view this as the next logical step for Amazon," Mahaney wrote. "We continue to believe Amazon has now set its eyes on the mobile (and tablet) media and product consumption frontier."