According to an exclusive report by former Wall Street Journal reported Amir Efrait Amazon is close to unveiling a free smartphone. The phone would challenge existing smartphone vendors who are used to charging large price premiums with their phones even when paired a contract. The report suggests the Amazon phone will be free whether people get it with a wireless carrier contract or not. There could potentially be other strings attached that ensure Amazon makes money on these free smartphones such as making sure people sign up Amazon’s Prime service.
Apparently the free strategy isn’t set in stone and we could end up seeing a low cost smartphone instead. The free tag depends on Amazon’s ability to negotiate favourable hardware contracts and also its ability to monetise the phone in a way that makes this all profitable. The free phone strategy is described by the report as “Apple’s Worst Nightmare” because they, along with quite a few other smartphone vendors, rely on the huge cost of smartphones in mature Western markets – even when paired with contracts. Why will people continue to pay $500-700 dollars for a handset or $100-300 for a handset on contract when they can get one for free?
Who knows whether these rumours will materialise but one thing is for sure and that is that this report is very interesting so definitely give it a read if you’re interested.
Image courtesy of Amazon
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