( CNN ) -- Amazon is rumored to be making a phone . Citing checks of the company 's supply chain , an analyst at Citigroup has issued a memo saying the phone may cost less than $ 200 and likely will be available in the middle of next year , according to multiple news reports in financial publications . `` With the clear success of the Kindle e-Reader over the past 3 years , and Kindle Fire possibly succeeding in the low-priced tablet market , we view this as the next logical step for Amazon , '' the investor 's note said , according to a report in Reuters . The blog AllThingsD says it 's likely the phone would run Google 's Android operating system : . `` ( Mark ) Mahaney 's note does n't spell out that the phone will use Google 's Android operating system , but it suggests that will be the case by positing that Amazon will need to pay Microsoft an 'OS royalty ' -- Microsoft has recently been able to extract royalty payments from other Android hardware partners . '' Of course , all of this is completely speculative , and based on one report from one analyst . Amazon did not immediately respond to CNN 's request for comment on Friday morning , and no on knows for sure if the company is working on a phone . But it 's interesting to tech journalists and investors in part because Amazon is creeping further from its roots as an e-commerce website and into new areas of technology , including hardware development . The company 's Kindle e-reader has been a hit for years , and Amazon this week put its new tablet , the Kindle Fire , on the market for $ 200 . Reviewers say the Kindle Fire is n't amazing -- not as functional as the iPad -- but they 're generally impressed with it given its much-lower price . The Apple iPad sells for $ 500 to $ 830 . The Amazon phone would cost the company $ 150 to $ 170 to make , and Amazon -- always one to offer low prices , even when it loses money on a sale -- likely would offer the phone for close to that price , Peter Kafka writes at AllThingsD . Still , all of this buzz about an Amazon phone raises a larger question : . Would you want to buy it ? This is completely anecdotal , but when Mike Elgan , a Silicon Valley tech columnist , asked this question of his followers on Google+ he got back plenty of `` no 's . '' Some of the responses from his followers : . `` I do n't even know how well their tablet works , much less an OS for the phone . '' `` -1 . '' `` No . '' `` Something that belongs on +The Onion news network : ) '' `` Amazon is going in the wrong direction . '' Others were more enthusiastic , if the price is right . `` $ 150 with no contract required would be an awesome deal , especially for the 40 % or so of people that do n't have a smart phone . my father in law wants an iPhone but not the data plan fee . ''
CitiGroup analyst : Amazon is working on a phone . The phone will be released in 2012 , the analyst says . Comment: