According to the report the online retailer is building a phone that allows the user to view the screen in 3D without having to wear any kind of glasses, much like Nintendo's 3DS.
The same rumours cropped up this time last year but nothing came of it. This time however there's been other reports that suggest suppliers for the phone began ramping up production of parts last much; the phone is said to run on a Snapdragon 800 processor with a 5-inch screen.
It's believed that Amazon's phone will feature multi-front facing cameras that will be able to sense the users eyes and will project three-dimensional images from the screen. The cameras are also said to allow for motion control, but it's currently unknown how such technology could be integrated into a smartphone device.
It will be interesting to see how Amazon implement 3D technology into a smartphone as it hasn't really gained any traction in the mobile phone industry as of yet. Users of the the Nintendo 3DS have previously complained that the 3D tech drains battery life, strains the eyes and can cause headaches.
Amazon have yet to confirm or deny these rumours but it wouldn't be much of a surprise considering they are already well established in the tablet market with their Kindle Fire line of tablet computers. Only last week they announced their entry into the video streaming industry by launching the Fire TV.