Inc. (Nasdaq: AMZN), the No. 1 e-retailer, could be on the verge of selling its own smartphones, which would be made by the same Taiwanese contractor used by Apple (Nasdaq: AAPL), the world's most valuable technology company, Bloomberg News reported.

The Seattle-based bookseller, which has already sold more than 5 million Kindle Fires that compete with the Apple iPad and other tablets, is working with Hon Hai Precision Industries (Taipei: 2317), whose Foxconn unit would build the phones.

Amazon CEO Jeff Bezos, 48, who has an electrical engineering degree from Princeton, has designed some elements of smartphones; last year, he received a patent for one that would deploy an airbag if a smartphone is dropped.

Representatives of Amazon declined comment. Shares of Amazon fell $1.44 to $225.62 in early Friday trading.