This thought isn't new. In fact it was believed almost half a year ago that Amazon would produce not only a 7" and a 10" tablet, but possibly even a smartphone. I disagree with that, because I don't think it makes sense from their point of view.
A tablet makes perfect sense for Amazon, not only because Apple scared them when they launched the iPad and they thought that the iPad could actually be an e-reader replacement (it wasn't), but because they could offer a lot more on a tablet than on an e-reader. Yes, Amazon is world's biggest bookseller, but they also sell a lot of other things, too. A tablet makes it easy to buy everything else they have to offer, while an e-reader is good just for selling e-books.
Amazon even has movies, tv shows and music to offer now, and those work a lot better on a tablet, too. A tablet is the perfect digital consumption device, which is why Amazon had to get into this market.
But a smartphone? What exactly would Amazon gain from this? They would enter a very competitive market, where there probably isn't enough room for 3 platforms, let alone 4. Even if Amazon uses Android, it would be more like a different platform with its own app store.
And what would their benefit be? Besides perhaps a slight increase in music sales on a smartphone, they would lose sales on everything else: books, movies, shows, and their other products. It's much easier to use those on a tablet, and to buy more products from a tablet. On the smartphone, you'd do it a lot less.
One possible reason would be that they want their Silk browser to be used by more people. But they could probably build that browser for the normal Android, too, and promote it there. But again, what good is that if people aren't going to do so much buying on the smartphone, so they will get less relevant purchasing data.
I'm not saying it would be impossible for Amazon to build a smartphone, but I find it pretty unlikely, considering it's not as good of a strategy as the tablet one.