Equity analysts at Citi believe Amazon is working on its own smart phone, and that the device could be launched in 2012.

“Based on our supply chain channel checks in Asia led by Kevin Chang, Citi’s Taipei-based hardware research analyst, we believe an Amazon smart phone will be launched in the fourth quarter of 2012,” Citi analysts say. Amazon smartphone?

The analysts also believe Amazon will offer the phone at attractive prices to mobile service providers. What is important to note, Citi says, is that Amazon does not need to make money on hardware.

Hence, it can sell a smart phone to carriers at $170 in the fourth quarter of 2012. For a normal brand like HTC (News - Alert), devices must then be priced at $243 to make 30 percent gross margin.

If Amazon is actually willing to lose some money on the device, the price gap could be even bigger.

The possible move illustrates an important aspect of the evolution of what we used to call “the mobile phone.” Amazon seems to be thinking that the smart phone is another important content consumption platform it wants to optimize for Amazon content. Tablets are content consumption devices

The perhaps-logical thinking is that as the new Kindle Fire features an optimized version of Android (News - Alert) that features easy access to Amazon content of all sorts, so a smart phone could be optimized to facilitate Amazon content purchases.

Amazon might be willing to bet that since smart phones already are content consumption platforms, as are e-readers and tablets, it needs to seed the market with lots of devices optimized to consume Amazon content.

Tablets are said to be “content consumption” devices, and a study conducted by Frank N. Magid Associates, which surveyed 2,482 people, between the ages of 8 to 64, backs up that contention.

The study found that tablets are preferred to PCs for virtually every form of content consumption. The study also found that long-form video is preferred over short clips on tablets.

That should ultimately have important implications for providers of online video services, as it establishes the suitability of the tablet for long-form video of the sort sold by multichannel video providers and Netflix.

Fully 55 percent of respondents watched full-length movies on their tablets and 56 percent watched full-length TV shows.

Some 87 percent of U.S. tablet users also are accessing content and information on their devices, the dominant activity for tablets, says study, sponsored by the Online Publishers Association (OPA).

A copy of the study’s findings is available at www.online-publishers.org.