The smartphone industry is close to being saturated (if it isn't saturated already). With the iPhones, Android phones, and the Google smartphone, it will be very hard for Firefox to get their name out there in the market. Their phones will probably not do so well compared to their direct competitors.
I do not think it would be a smart idea for Firefox to delve into the phone industry. I do not think they are capable of making a great smartphone. Even if they manage to do so, it will be hard to take customers away from existing companies. Many smartphone users are loyal to specific brands and Firefox would struggle.
Firefox has gotten a habit of releasing new versions of its browser that are comically more bloated and slower than the previous ones, and they've been at this for a long while. I have no confidence in their ability to develop a smartphone, I also think it could potentially wipe them out.
Firefox should not develop a smartphone for numerous reasons. I believe that if Firefox attempted to develop a smartphone, the competition and cost would be too much for their business to sustain. Companies such as Google and Apple have massive resources and are very intensely competing in the smartphone markets. If Firefox tried to compete, these large competitors would likely outspend them and eventually Firefox would fail. Customers are also very loyal to their smartphone designers and it would be difficult to get them to switch from their Apple and Google devices. For these reasons, Firefox should not develop a smartphone.