Remember when Amazon was just an online bookstore? Man, those were the days. Palm and Handspring were making PDAs, email was finally catching on, and most of us still had to call the internet from our home phone lines. A lot has changed since then, and Amazon is a whole lot more than "the world's largest bookstore" these days. They basically invented the e-reader market a few years back, and when Apple tried to take it away from them with the iPad, they responded with the Kindle Fire. Though the Kindle Fire hasn't made much progress toward knocking the iPad from it's lofty perch at the head of the tablet market, it's done pretty well for itself.
Now, however, it looks like Amazon may not be content with gaining a foothold in the tablet market. According to a report this morning from Bloomberg, they may be going after the smartphone market, too. Citing "two people with knowledge of the matter," Bloomberg says that Amazon is working with Foxconn to create their own smartphone, which, for the sake of convenience, we'll call the Kindle Phone until Amazon tells us otherwise. They also say that Amazon is in the process of acquiring patents to insulate itself from charges of infringement down the line.
Bloomberg's report doesn't say anything about potential carriers of the software platform for this Kindle Phone. The carrier question will be difficult to speculate on until an actual announcement is made. As far as the operating system goes, though, the answer is pretty clear. The Kindle Fire runs on a modified version of the Android operating system. It makes the most sense to use the same software on Amazon's smartphone as well, especially if the phone shares the Kindle branding. To do otherwise is to run into potential compatibility problems between two members of the Kindle family.
Of course, this Kindle Phone is all just a rumor at this point. Nevertheless it's a logical move for Amazon. The mammoth online retailer has a thriving content ecosystem already in place. That ecosystem has been a major contributing factor to the success of the Kindle Fire, and would give any Amazon smartphone a definite boost.