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You know, if Amazon aquired webOS that might even give them the opportunity to enter the cell phone market, which could be a logical next step after the Fire...

Oh, for a cell phone with an E-ink display...

Why would you want a cell phone with e-ink? It wouldn't improve the standby time at all since that's determined by the radio, not the screen. Sunlight readability would be nice but there are LCDs that are pretty good and anything interactive would be painful on a slow e-ink display.

    It wouldn't improve the standby time at all since 
    that's determined by the radio, not the screen.
In smartphones the display is the biggest consumer of battery.

For instance, I rarely use my Android smartphone, other than for making calls / reading emails (and I really don't do that frequently), and the display is usually eating up ~ 30% of my battery, even though I always keep my data connection + sync ON. And there's nothing that drains my battery faster than doing Internet browsing, with the stats on my Android showing the display taking more than 50% of battery life. And if I'm outside, in the sun, browsing the web ; to make the screen readable I have to increase luminosity, and so my phone drops dead in 2-3 hours.

Another example - I also have an old Nokia 1100 - it's absolutely insane how the battery lasts for a whole week. If you can make your smartphone last for 6-7 days with whatever you want turned off, let me know ;)

I would also like an e-Ink smartphone, since it would be perfect for reading emails, in direct sunlight and also increase the battery life to more than 1 day - yeah, that would be awesome.

If the screen uses 30% of your battery then switching to e-ink would be a 30% improvement at best. Hardly Nokia 1100 territory. Though it would be so slow and annoying to use that you wouldn't use it as much, so that would "help" too. Also, need I remind you that your Nokia 1100 has an LCD screen?
The Nokia 1100 has an LCD screen indeed, but it is black and white, without much luminosity.
Right; the only resl advantage e-ink has over this type of low-power LCD is brightness, and it comes at the cost of 1+ second response time with flickering. A terrible trade off for an interactive phone.
Looking at battery use statistics in my phone:

Voice calls - 33% Android System - 13% Maps - 12% Display - 11% Dialer - 11% Youtube - 10% Cell standby - 7% Phone idle - 4% Camera - 3%

The display does not seem to be particularly bad.

I saw a grey-scale style calendar (branded with a pharmaceutical brand) in a pharmacy the other day. I asked if it was an e-ink display and they said yes. Then they realised it was just an old-style flip-page calendar which LOOKED like e-ink.
You can - or could - get cell phones with E-ink displays. Like the Motorola Fone:

http://en.wikipedia.org/wiki/Motorola_FONE

...it just happened to be rather basic. Perhaps that was the point.

I am aware of that phone, but I was never able to find them for sale at anything close to a reasonable price.
I imported one for $50 and have had it for 4 years. It's only passable as a phone to be honest as the old eink display used could only show a few types of characters (no uppercase letters!). I'd be very interested in a new eink display phone but my standards for acceptable UI has been raised by modern smartphones.
Amazon should do a tablet with a LCD screen on one side and eInk on the other. They can share a lot of components (battery, CPU, radios), so it may not be as bulky as one might think. And then you could read a book inside on LCD, step outside, flip the device over and you're reading the same page in eInk. Likewise for webpages.
There is, or at least was, actually at least one dual LCD/eInk display. It is called the Pixel Qi.
Yeah the Pixel Qi and Mirasol displays just never looked very good IMO. I saw the Notion Ink Adam videos in sunlight and it didn't look very good. Nothing like the Kindle. I think the technology to do both in a single display is just not there. Otherwise I think Amazon would have used it.
I saw a Mirasol device (demo model) and it was lovely, both in sunlight and indoors.
>the argument could be made that Palm invented the smartphone

Didn't Qualcomm beat them to it? I remember reading about a Qualcomm phone which was a PalmOS device, around 2000 or 2001. At that time, I don't think Palm had any smartphones of their own; the closest they had was the Palm V, which had wireless data, but was not a phone.

An argument of why they won't buy webOS from HP -- IMO, Amazon shows its focus on recent launch. They didn't release an Android phone, but just an Android tablet to build their empire of content. Hence they don't need differentiations on hardware/OS level, instead they want a hardware/OS which they can: push their cost way down; cheap enough to get people on board; and sell their content.
They may not care about what the user thinks of the OS, but if they do many of these devices, they are going to want a unified OS they control. They built a custom Linux for each Kindle, and now a heavily-modified Android? It's great stuff, but there's a lot to be saved if they can bring it all into the same code base.
Not to mention, Microsoft and Oracle are busy strong-arming Android companies like Google and HTC to making Android not cheap.

WebOS may not be as widely deployed as Android, but it comes with a patent portfolio that may keep it cheaper than litigation/licenses.

Amazon don't have access to Honeycomb source which supports larger screen. May be it is one of the reasons to think about buying webOS. Don't know how difficult it is to add support for larger screen in Android 2.2/2.3 though.
I would find it hard to believe that Amazon can't call up Google saying they need in on Honeycomb to make a Kindle run Android.
Why would Google give it to them?
Because they'd already promised to release it anyway and they were buying at most 6 months lead time on a 'competitor' at the cost of forking their app base between two popular flavors of Android.
Does Google want Amazon's fork to succeed? They sure haven't welcomed them to the family...
Given Sun's welcome to Android, I wouldn't assume a warm welcome is a reliable indicator of whether motives are benign, or legally binding if they later change.

I don't particularly think that Google are popping champagne about the Kindle Fire, but if they had to choose I'm guessing they'd rather a Kindle Fire than a Windows 8 tablet or an iPad every time. Or indeed a hypothetical Kindle Fire from Amazon that ran iPhone Apps on a Windows kernel rather than being Android-based. (I was going to write WebOS there, but I think that's fairly positive for Google too)

Google would most likely require them to put their Market on the devices. Amazon prefers to sell from their own App Store.
Butbarent Amazon using their own GUI? The only low level stuff they might need apart from bug fixes is proper multicore support.
I think what I wrote the last time this came up on HN still applies:

"Amazon's already invested a lot in the Android platform with the Amazon Appstore and all the other assorted Amazon Android apps. Considering that migrating to WebOS would require Amazon to:

(a) actually obtain the rights to WebOS (whereas with Android they can just fork a version from git),

(b) retool all their existing app infrastructure to support WebOS, and

(c) promote WebOS to developers when probably the only WebOS device that would be available to them would be the new Kindle and the fire-saled Touchpads,

I don't really see them moving to WebOS, or away from Android in general, anytime soon."

This article is just crazy talk.

Amazon is not a device company, has never been a device company, and has no intention of becoming a device company. It would only acquire a boat anchor like webOS if it had no reasonable alternative (and even then I doubt it). It has plenty of alternatives.

Kindle as a device is simply a near term means to an end: To ensure that there are phenomenal ways for consumers to access the Amazon cloud services.

Amazon has no desire to make $ directly off of devices. It has been happy to sell them at a loss, and will continue to be happy to (to a point). They will also continue to be happy to invest in great experiences that run on other devices (Kindle software for iPhone/iPad/Android/WP7/PC/web as well as the Amazon.com store).

Repeat after me: Stop focusing on the device. Device centric computing is done.

Cloud+Devices+People is the future. Amazon knows this as well as anyone and is in a great position to capitalize on it.

In other words, we'll regress from having a PC to a net-enabled terminal—they'll just be called "smartphones" and "tablets" instead. Just like computing started it looks like there is a trend to, again, go back to the terminal model.

    "There is nothing new in this world." - Some wise person
You could paint it that way, but I choose to view it differently.

The "new" terminals are far smarter. Nobody will ever confuse them with dumb terminals.

There are a wide range of popular form-factors (phone, tablet, TV, car, watch, browser, PC, signage, ...) where in the old terminal model there was one (~PC).

And the kicker: The "app" is now designed to not only SPAN all of those devices but to do so in a rich, people-centric way. That "rich way", by the way, requires huge client side computing resources.

Lastly, I said "people-centric" above because the actual equation for the new value proposition is:

    experience = people + devices + cloud services
Note all entities are plural.
What's stopping Amazon from becoming a device company (and I think they already are)? How can you be so sure about what Amazon's strategy could be? Do you have some insider knowledge?

Amazon's primary motive is to generate money. If device business adds 10 billion USD to their yearly revenue, who will complain?

Did the meaning of "no-brainer" change to "the action of someone without a brain" while I wasn't looking?
I think the clause about patents is right on. Given the current spate of lawsuits against tablets and android, building up a defensive patent portfolio makes good sense.