Amazon is expected to produce a smartphone that would compete with Apple’s iPhone.

Photo: Amazon packaging, from www.bloomberg.com

According to Bloomberg, Foxconn International Holdings Ltd., the Chinese mobile phone maker, is working with Amazon on the device, said a person familiar with the matter. Additionally, the company is said to start producing portable devices that run Android. Last November, Mark Mahaney, an analyst at Citigroup Inc., also said that Amazon is planning to release a smartphone. Mahaney added that the smartphone could be expected in the fourth quarter of 2012. Amazon, declined to comment.

Seattle-based Amazon, known not only as a book and media seller but as a producer of low-priced Kindle family readers and tablet want to make more money from hardware devices. According to other people familiar with the matter, Amazon is now working with Foxconn, Apple’s iPhone and iPad supplier, to bring the smartphone to the market.

Another fact that proves the Amazon plans to enter the smartphone segment is the acquisition of the 3-D mapping startup UpNext. The mapping service is widely used on smartphones and both Google and Apple are constantly improving their mapping services. Amazon products significantly differ from those of competitors.

 “Given that Amazon’s strategy is to treat devices as a content hub rather than a standalone product, it’s pretty likely that price points for the smartphone would be very aggressive,” according to ABI Research Analyst Aapo Markkanen to Wired.