After the release of the Amazon Kindle Fire Android tablet, rumors have already surfaced about Amazon creating a smart phone. It would of course be called the “Kindle Phone”, and is rumored to pack a Texas Instruments OMAP 4 processor and to be priced around $200 or less.

Is it Possible?

Of course, no one expected Amazon to create a tablet, let alone their own Android app store variation. However, now that they have gotten themselves into the game and have gotten so much attention, expansion is inevitable.

Is it Probable?

Yes, Allthingsd reports that “Based on our supply chain channel checks in Asia led by Kevin Chang, Citi’s Taipei-based hardware research analyst, we believe an Amazon Smartphone will be launched in 4Q12.”

Will It Be Worth It?

After analyzing the price to manufacture the Kindle Fire Tablet, internet sources have estimated that Amazon looses anywhere from $5-$50 on each tablet that they sell. Therefore, with the Kindle Phone slated to cost $150 to $170 to build, we could possibly be looking at a $150-$250 (or cheaper) unlocked phone.

Amazon is able to do this after they made sure that customers can only buy their music, apps, books, and more straight from their stores. Also, they are guaranteed to make back some, all, or more of the losses from selling their devices so cheap.

This strategy is loved by many and seems to be working out for Amazon. In addition, if Amazon would partner up with Republic Wireless, they can sell a sub-$200 smart phone along with a $19/month “unlimited data plan”.

Anyone interested? Leave your thoughts in the comments below.