Amazon reportedly wants to make first smartphone offering free

Posted:
in General Discussion edited January 2014
Amazon may be plotting a move into the smartphone segment, and the online retail giant may have just the trick to help it make a splash in that Apple/Samsung-dominated market: offering its smartphone for free.



Amazon has been rumored to be working on a smartphone for years, and those rumors have picked up steam in 2013. Now, Jessica Lessin cites sources familiar with Amazon's efforts in saying that the company wants to offer a free smartphone to consumers.

The free strategy is still in the planning stages, Lessin says, and it is not set in stone. One of Amazon's biggest concerns at the moment is reportedly getting the carriers on board with the plan. Telecoms regularly offer older and cheaper phone models for free, provided a customer signs up for a two-year contract agreement, but Amazon wants the phone to be free with or without a contract.

As with the retailer's Kindle Fire tablets, any smartphone from Amazon would run a forked version of Android, one with all of Google's services removed and running Amazon's own services instead. Amazon sells those devices, as well as its line of dedicated Kindle e-readers, almost at cost, with the plan being to make the money back selling goods and services to the customer. The free smartphone plan would be an extension of that mindset, though how viable that plan is remains to be seen.

Earlier this year, rumors reemerged that Amazon was planning to launch a smartphone in 2013. Those rumors first centered around a device with a 4.7-inch screen, while later reports had the handset implementing a glasses-free holographic 3D display. The phone has yet to materialize in any form, but it is possible that Amazon will show it off when it reveals the next generation of Kindle Fire devices. When that might happen is uncertain.
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Comments

  • Reply 1 of 54

    Good for them....

     

    Ugh!

  • Reply 2 of 54
    rogifanrogifan Posts: 10,669member
    So how would Amazon exactly pay for these free phones, especially if they're unlocked and don't require a contract? Even their tablets, which they're supposedly selling at cost aren't free to the consumer.
  • Reply 3 of 54
    Yeah, right 4.7 inches. It's too small if you can fit it into your pocket. Amazon needs to shove a phone into their Kindle fire and make it free. /s
  • Reply 4 of 54
    We lose $300 on every one we sell, but we'll make it up by selling things to people on them! And ads that must be clicked on every time you get a call before it will let you pick up!
  • Reply 5 of 54
    This sounds anticompetitive ... If Apple can't charge a little over than Amazon why does Amazon get to undercut all business and offer for free ?
  • Reply 6 of 54

    When I see the word "free" there are some old sayings that come to mind...

     

    "you get what you pay for"

     

    'there is no such thing as a free lunch"

  • Reply 7 of 54
    Originally Posted by ILM1997 View Post

    This sounds anticompetitive ... If Apple can't charge a little over than Amazon why does Amazon

     

    Because they paid off the DoJ and Apple didn't. Simple.

  • Reply 8 of 54
    Quote:

    Originally Posted by AppleInsider View Post



    The free strategy is still in the planning stages, Lessin says, and it is not set in stone. One of Amazon's biggest concerns at the moment is reportedly getting the carriers on board with the plan. Telecoms regularly offer older and cheaper phone models for free, provided a customer signs up for a two-year contract agreement, but Amazon wants the phone to be free with or without a contract.

    Can't believe they'll have trouble getting the carriers to just give them away for free. /s

     

    I'm left wondering how they would actually get paid for in the long run. Are they to be subsidized by the carriers? Amazon gives the hardware to the carriers and gets a cut of the data plan profits? If you aren't REQUIRED to sign a contract, would lots of people just take them and use them like an iPod Touch?

  • Reply 9 of 54
    jungmarkjungmark Posts: 6,633member
    The DoJ will allow this predatory pricing of free. Then DOJ will start suing other phone manufacturers demanding them to be free.
  • Reply 10 of 54

    Also, it's a huge party line, you have to wait for everyone to shut up before you can say anything, and everyone else can hear what you say and make comments.

  • Reply 11 of 54
    Most likely "free", but on contract.
  • Reply 12 of 54

    Ad-supported. 

     

    In-phone purchase ($699) to remove ads. 

  • Reply 13 of 54

    Every Apple employee and iPhone user should just go grab the free one and then throw it in a drawer. Millions of free Amazon phones given away and not a dime in return for all those ads. That would stop this predatory pricing scheme of Amazon. Oh and the DOJ can bite me if they ignore this scheme which they probably will.

  • Reply 14 of 54

    I hate the freemium model on any app store. I am not gonna buy freemium hardware. 

  • Reply 15 of 54
    quinneyquinney Posts: 2,521member
    Profit-postponing moves have worked well for AMZN. This is another one.
  • Reply 16 of 54
    Quote:

    Originally Posted by quinney View Post



    Profit-postponing moves have worked well for AMZN. This is another one.

     

    Should move the forward p/e above 150.  :p

  • Reply 17 of 54
    Originally Posted by island hermit View Post

    Should move the forward p/e above 150.  :p


     

    It was 3,000+ before they lost money in a quarter. Are they back in the black?

     

    EDIT: I love their really classy image, by the way, of a dirtied and scuffed Time Capsule. Particularly since the Seagate drive next to it isn't damaged in any way.

  • Reply 18 of 54
    iaeeniaeen Posts: 588member
    Every Apple employee and iPhone user should just go grab the free one and then throw it in a drawer. Millions of free Amazon phones given away and not a dime in return for all those ads. That would stop this predatory pricing scheme of Amazon. Oh and the DOJ can bite me if they ignore this scheme which they probably will.

    If this were to happen the iPhones ~40% US market share would drop below 29% and we would all have to suffer through a barrage of fandroids claiming Apple is doomed...

    Though, yes it would be worth it to see Amazon be driven to bankruptcy.
  • Reply 19 of 54
    Every Apple employee and iPhone user should just go grab the free one and then throw it in a drawer. Millions of free Amazon phones given away and not a dime in return for all those ads. That would stop this predatory pricing scheme of Amazon. Oh and the DOJ can bite me if they ignore this scheme which they probably will.

    Haha, I was thinking the exact same thing.
  • Reply 20 of 54
    jragostajragosta Posts: 10,473member
    rogifan wrote: »
    So how would Amazon exactly pay for these free phones, especially if they're unlocked and don't require a contract? Even their tablets, which they're supposedly selling at cost aren't free to the consumer.

    If they really do give them away for free, unlocked and without a contract, they might have a serious antitrust problem there. With their huge market position in eBooks, that may be anticompetitive.

    They got away with it on the Kindle because for purposes of dumping laws, 'cost' is essentially out of pocket cost, not total amortized cost.
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