Just a few miles away from Apple’s corporate headquarters in Cupertino, Amazon’s secretive Lab 126 division is hard at work.

The group is led by Gregg Zehr, a former Palm VP of hardware engineering, and its mission is to build Amazon’s next killer device. The 800+ software and hardware engineers at Lab 126 have created the successful Kindle e-readers and the game-changing Kindle Fire tablet. Now, they are about to finish work on a new generation of tablets, and gossipers say, working on Amazon’s first smartphone.

Reuters reports that Staples president Demos Parneros said that Amazon will launch five or six tablet stock-keeping units (models in retail speak), of which at least one with a 10-inch display. This confirms previous speculations, although five new models might be too much. Perhaps Parneros referred to some new ereader models, and not only tablets.

According to the same report, the staff of Lab 126 grew tremendously over the past of year. Last September, about 500 LinkedIn users indicated that they work at Lab 126, while right now there are more than 800. The real head count is higher, as most likely not all employees have an updated account on the professional social network site.


Amazon has brought people from competitors such as Microsoft, Nokia, or Apple. Moreover, Reuters reports that a series of job postings from the past months indicate that Amazon is indeed working on a smartphone. For instance, Lab 126 is looking for a Hardware Validation Engineer, whose responsibilities include working with carriers to ensure compatibility of devices, and a Field Quality Engineer, that would be responsible with the field testing of smartphones.

But while none of the listings actually reveals any concrete detail about what Lab 126 is doing right now, a smartphone makes perfect sense for Jeff Bezos’ company. By now, Amazon is sitting on a treasure trove of data, gathered from the millions of Kindle Fire users. They know the what, when, why, and how of mobile media consumption. They have an immense cloud infrastructure at their fingertips, waiting to be delivered in bite sized chunks to millions of smartphone owners. And, with a successful Kindle Fire launch under their belt, the people at Amazon also know how to deliver cheap hardware that is just good enough for many customers.

Of course, smartphones are a different ball game. Amazon will have to deliver something truly amazing to carve a niche for itself in the ultra-competitive smartphone market. But, if anyone can disrupt the smartphone market, seemingly out of the blue, Jeff Bezos and Amazon can.