Amazon Smartphone Rumors Continue on News of Siri-Like Buy

Amazon has reportedly paid $26 million for a startup with a Siri–like product, encouraging rumors of a smartphone in progress.

Rumors that Amazon is planning a smartphone continue, most recently fueled by the company's reported purchase of a Siri-like knowledge engine.

TechCrunch reported April 17, citing sources, that Amazon has purchased True Knowledge, a British startup that "licensed Nuance's voice-recognition technology and created an app based on the True Knowledge engine, called Evi, which worked on any iPhone and Android."

Evi can understand what users are asking, learn as it's used and has almost a billion "machine understandable bits of knowledge," or facts, says the report.

According to sources, the deal cost Amazon $26 million.

Rumors that Amazon plans to launch its own smartphone have been circulating for nearly a year. It already has a large and growing app store, and in the coming months it plans to expand its app distribution platform to nearly 200 countries. It also has a successful tablet business that could neatly align with a smartphone effort and a business platform for effectively reaching broad swaths of consumers. At this point, it would surprise no one if, like Microsoft, Google and even Facebook, it decided to complement its existing mobile assets with a smartphone.

Last summer, Amazon was reported to be working with Chinese manufacturer Foxconn—best known for assembling iPhones and iPads for Apple—on the details of building a smartphone.

It also hired industry players capable of helping it assemble the necessary patents for a smartphone product.

In particular, Amazon hired Matt Gordon, formerly a director of IP licensing at Microsoft, to handle patent acquisitions and investments at Amazon. Having the necessary patents in place would be critical to a smartphone effort, given both the highly litigious nature of the industry and because Amazon seems to have (or had) a few holes in that area.

According to Bloomberg, over a span of two years, Amazon was the subject of 25 patent-related lawsuits.

This month, Charlie Kindel, a 20-year Microsoft veteran, announced on his personal blog that Amazon had hired him to go after a "totally new area." On his LinkedIn profile, Kindel added that he is working for Amazon on "something secret."

While the smartphone market is savagely competitive—all players but Samsung and Apple are having trouble keeping their footing—it's one forecast for still massive growth. This year, research firm IDC expects smartphone sales to surpass feature phones, with vendors shipping 918.6 million smartphones.

"Smartphone prices have fallen globally, the smartphone strata are wider than ever and the roll-out of data-centric fourth-generation (4G) wireless networks are three factors that have made these 'do-it-all' devices an increasingly attractive option for users," IDC said in a March 4 report.

By 2017, the firm expects worldwide smartphone shipments to reach 1.5 billion, with China, India and Brazil all playing large roles in the world's growing demand.