Amazon.com and Foxconn are reportedly developing a smartphone that would be competitive to Apple's iPhone and other smartphones based on the Android OS, Bloomberg reported today citing "people with knowledge of the matter". Amazon is also seeking to complement the smartphone strategy by acquiring patents that cover wireless technology, the report added. Adding patents would help Amazon protect itself against lawsuits alleging illegal use of technology.

Amazon has not commented on the report.

Last November, an analyst at Citigroup Inc. had also said that Amazon was planning to release a smartphone.

A smartphone would further help Amazon make money from digital books, songs and movies.

Amazon's move comes amid reports that the company is also eyeing production of the new tablets - all with 7-inch screens - timed for the holiday shopping season. These will be positioned against Apple's iPad mini, according to industry tracker DisplaySearch.