The upcoming Amazon Kindle smartphone could be offered for free, according to a new report. This will effectively make Amazon the first large manufacturer to offer a free handset, according to Amir Efrati and Jessica E. Lessin, former Wall Street Journal reporters.
Rumors that Amazon is preparing a smartphone have been around for quite a while, but until now, there was no hint of said marketing strategy it could possibly use.
Citing sources who are familiar with the matter, the two claim that Amazon would be offering the device for free even if consumers choose not to register for a new wireless plan. Regardless of such insider information, Amazon’s marketing move still has a lot of gray areas. For instance, it is still unknown if the zero-cost price tag would mean that the company would try to make money instead from fees for Amazon services.
Furthermore, their sources suggest that Amazon may sell the device directly on its website. However, they added that the retail giant has also approached wireless carriers regarding the possibility of selling the Amazon Kindle smartphone.
Pocket Lint notes that Amazon’s marketing move for its new handset is comparable with its strategy for the Amazon Kindle tablet. It would be recalled that Amazon had a lot of success with selling the Kindle tablet at a low cost, while supporting itself with revenue from paid content and advertisements. With the Amazon Kindle smartphone, the company hopes to repeat its success with an attractive price.
Another company which employs a similar strategy is Google. Like Amazon, much of Google’s earnings come from advertisements and paid content.
It is worth mentioning that Amazon’s strategy it is the direct opposite of what Samsung and Apple are doing to sell their smartphones, as Lessin and Efrati indicate. Both companies typically sell their new flagship handsets that are are packed with plenty of features and noteworthy specifications at high prices. Older models, meanwhile, are priced low, but come with contracts.
Amazon may still change its mind on offering the Kindle smartphone for free. Its decision will ultimately depend on whether it can generate profit from sources apart from the device’s price tag as well as on the deals it will make with hardware partners.
Will Amazon set a new trend in pricing smartphones? Perhaps. Other companies may need to price their products more aggressively, especially if the Kindle smartphone is a hit. However, it can be argued that companies are already addressing the consumers’ clamor for more affordable devices. Apple, for one, reportedly has a cheaper version of the iPhone bound to arrive soon. Meanwhile, Samsung has plenty of smartphones aimed at the low-end segment. Also in the rumor mill is a more pocket-friendly version of the Motorola Moto X. Meanwhile, China-based phone manufacturers have long been offering affordable smartphones, although some have recently released pricier high-end models.
Amazon, according to the same report, has not issued a comment regarding the new Kindle smartphone rumor.