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Amazon.com, Inc. (NASDAQ:AMZN) could re-enter the phone industry. Amazon is in discussions with phone manufacturers to integrate its services with Android phones.

Amazon.com, Inc. made its first foray into the mobile industry with its Fire Phone. Its Kindle tablets did ok, but the Fire Phone never really took off. That came with a forked Android OS that integrated with Amazon services, but they discontinued the handset and had not revealed any plans for a followup model. However, a report from The Information suggests that the retailer giant is planning to have another go in the smartphone industry with an alternative approach.

The report has quoted sources from Amazon and states the company is now in discussions with Android smartphone makers (or OEMs). The discussions would likely pertain to the manufacturers integrating Amazon services into Android phones at a factory level. So that would mean a little more than merely pre-loading their apps, which the company is already doing with some manufacturers.

What this would more likely mean is that manufacturers install a customized version of the Android OS on the phones. That customized, or forked, Android OS would be tailored to Amazon’s requirements. Consequently, it would probably be more like the Android platform on the Fire tablets with a few Amazon services and apps bundled in.

There are, however, a few problems with such a deal that manufacturers might point out to Amazon. The main thing to note is that Google has Android licensing restrictions in place for the inclusion of its own services. For instance, if an OEM included the Amazon App Store with the phone, the licensing restrictions would require that the manufacturer removes Google services from the handset. That would include the removal of apps such as YouTube, Google Play, and Docs, which aren’t available on the Fire tablets.

So any potential OEM partner for Amazon would have to strike a balancing act with the Google licensing restrictions. However, a good number of manufacturers have already customized the Android OS fairly extensively. So, at least, a few Amazon services could be thrown into the Android mix within Google’s licensing conditions.

But with the current licensing restrictions in place, in addition to “anti-fragmentation” clauses, there are notable obstacles for OEM partnerships with Amazon. Hence, it won’t be easy to strike some effective deals with Android handset manufacturers. At best the company could probably strike a bargain to integrate limited services with Android.

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