Amazon is working with HTC to develop a range of smartphones as the online retailer steps up efforts to compete with Apple and Google, according to people familiar with the project.

One of the three devices discussed by the two companies is at an advanced stage of development, according to one person, but another warned that the timeline for launch has been changed before and Amazon may yet decide not to release it. Rumours that Amazon would enter the smartphone market have been circulating for up to two years. The device is unlikely to launch this year but may launch in 2014 if Amazon decides to proceed with the project.

Amazon did not respond to a request for comment. In response to a recent report on its mobile ambitions, it said that it had “no plans to offer a phone this year”. HTC declined to comment on Amazon, but Ben Ho, its chief of marketing, said the company is “always exploring new opportunities”.