( CNN ) -- Amazon may be coming out with its own smartphone , according to a new report from Bloomberg . The company reportedly is working with Foxconn to develop the hardware , which will likely run Amazon 's version of the Android operating system . A phone is n't as far-fetched of an undertaking as it might seem for the company , which has never made a handset . Amazon already has many of the building blocks it would need to make money off a smartphone , including its own version of the Android operating system , an established app store and well-stocked content marketplaces that could make up a good chunk of revenue for the phone . It also has a pool of loyal customers who trust the brand . Amazon is relatively new to the hardware game . The company 's first entry was the Kindle e-reader released in 2007 , followed by its Android-powered big brother , the Kindle Fire tablet . Amazon has had more success than many other companies in the tablet market thanks to getting in early and a low price made possible by revenue from books , movies and music . However , the smartphone market is already filled with well-established competitors . Current market leader Samsung shipped 42.2 million smartphones worldwide in the first quarter of 2012 , according to research firm IDC . Apple was a close second with 35.1 million smartphones , followed at a distance by Nokia and Research In Motion . There are also some challenges unique to selling smartphones . To build a decent device , Amazon will need the right patents so it does n't end up on the receiving end of costly lawsuits . To that end , the company just hired a new general manager for patent acquisitions and investments , Matt Gordon . Dealing with carriers would be another hurdle . Ina Fried at AllThingsD floated an intriguing theory : Amazon could buy wireless service wholesale from the big carriers and bundle it with the devices , like it does for the Kindle . The rumor that Amazon would unveil a smartphone late this year surfaced in November 2011 , when Citigroup 's research department predicted the device based on its supply chain checks in Asia . The new report , based on two anonymous sources `` with knowledge of the matter '' supports the original theory floated by Citigroup .
Report : Amazon is working on a solution . Amazon already has a store , and its own version of Google 's search system . Selling phones would hurt them in an already competitive market , though .