Amazon's smartphone development on the way

After releasing its Android powered tablet KindleFire, Amazon is now all set to release its first smartphone. Amazon has collaborated with Foxconn in development of its own smartphone. Foxconn is the company that is also collaborated with Apple in the development of iPhone. With this plan underway, Amazon's single aim is to provide a much cheaper smartphone when compared to iPhone and have its own share in the midst of Android and iOS dominated marketplace. The development is under way and first smartphone from Amazon is expected in the final quarter of 2012. Can Amazon challenge iPhones with this move? What are your thoughts?