Amazon's Kindle Fire is a hot seller, so will the company tackle smartphones next?

The Kindle Fire tablet doubled its share of the Android tablet market earlier this year, jumping to 54 percent of all Android-based tablets in February.

So, some analysts say that a smartphone is the next logical step for Amazon's hardware division.

Citigroup's Mark Mahaney released a report last year that claimed Chinese factories including Foxconn already have an Amazon phone in the works, and that it would launch in Q4 2012. If it comes to fruition, Amazon would sell it at cost - $150 or $170 (£92 or £104).

And with rumors of even a Facebook phone heating up, Amazon's success with the Kindle Fire seems to point more and more every day to an impending grab at the smartphone market from the online giant.

Advantages and disadvantages

The Amazon phone would almost certainly run a modified version of Google's Android OS , much like the retailer's popular Kindle Fire, and would act as a direct portal to Amazon's massive online store.

Amazon's shopping and Kindle apps are already available on iOS and Windows Phone devices, but Amazon's affordable price point (they're already rumored to be selling the Kindle Fire at cost) and perceived brand reliability could be enough to attract your average customers.

But the idea of an Amazon phone is not without misgivings.

There are a plethora of Android phones on the market currently, and Amazon could have trouble differentiating its own product from the pack.

And if the Amazon phone uses a unique version of Android similar to that on the Kindle Fire, it could be unattractive to developers looking for the largest possible market.

Furthermore, the streaming services that Amazon users take advantage of on their Wi-Fi-enabled Kindle Fires could eat away at an Amazon phone's 3G or 4G data plan, analysts say.

But with Amazon's busy online storefront potentially serving as a free digital stage for the Amazon phone, much like it has for the Kindle Fire, Amazon may have all the advantage it needs in grabbing its share of the smartphone market.

Via Wired