Rumor: Amazon Is Making a Smartphone, May Give It Away for Free

Future Tense
The Citizen's Guide to the Future
Sept. 6 2013 5:07 PM

Rumor: Amazon Is Making a Smartphone, May Give It Away for Free

Jeff Bezos: the "Crazy Eddie" of the tech world?
Jeff Bezos: the "Crazy Eddie" of the tech world?

Photo by Mario Tama/Getty Images

Here's one way to steal Apple's thunder.

Will Oremus Will Oremus

Will Oremus is Slate's senior technology writer.

Days before Apple is scheduled to announce a new, cheaper iPhone, sources are telling former Wall Street Journal reporters Amir Efrati and Jessica Lessin that Amazon could become the first tech giant to offer a smartphone for free, without a service contract. The report is far from solid, quoting anonymous "people familiar with Amazon's effort" and asserting only that the company is "considering" introducing the device for free. The story gets shakier from there, implying that there may be other financial strings attached, and then acknowledging that the free strategy "isn't set in stone." From the piece:

There are many unanswered questions about the plan and what strings will be attached for customers. One of them is whether Amazon would require its smartphone owners to pay for services such as Amazon Prime, the company’s loyalty program. But the people familiar with the matter said that Amazon wants the device to be free whether or not people sign up for a new wireless plan at the same time. ...
The free strategy isn’t set in stone and depends on several factors, including Amazon’s ability to work out financial arrangements with hardware partners, said one of the people who is familiar with Amazon’s smartphone effort. This person and others expressed skepticism about Amazon’s ability to pull off a free device.
Advertisement

I second that skepticism. It's one thing to "consider" giving away smartphones and quite another to actually give away smartphones. But it's tantalizing to imagine, and if anyone company could do it, Amazon would be a leading candidate. The company's hardware strategy has been to use devices as loss leaders for Amazon's retail business. Actually, you could argue that Amazon's entire business is basically a loss leader for itself.

Recall, though, that there were also rumors at one point that Facebook might give away smartphones as a loss leader for its business of harvesting users' data. In fact, the "Facebook phone" launched with a price of $99. After it flopped, the price was cut to just 99 cents with a contract, but HTC found it could barely give the thing away.

Of course if Amazon handed out phones with no strings attached at all, they'd be gone in a jiffy. But the Facebook phone fiasco suggests that even the barest financial obligations may be enough to scare a lot of consumers away from a phone that they wouldn't be inclined to buy otherwise. So unless Amazon really is going to just start shipping scot-free phones until it runs out of them, the lesson is that the hardware itself is going to have to hold some appeal for customers in order to catch on.

Future Tense is a partnership of SlateNew America, and Arizona State University.

TODAY IN SLATE

Technology

Driving in Circles

The autonomous Google car may never actually happen.

Where Ebola Lives Between Outbreaks

Gunman Killed Inside Canadian Parliament; Soldier Shot at National Monument Dies

Sleater-Kinney Was Once America’s Best Rock Band

Can it be again?

The Simpsons World App Is Here, and Nearly Perfect

Science

“I’m Not a Scientist” Is No Excuse

Politicians brag about their ignorance while making ignorant decisions.

Politics

The Right to Run

If you can vote, you should be able to run for public office—any office.

In Praise of 13th Grade: Why a Fifth Year of High School Is a Great Idea 

Renée Zellweger’s New Face Is Too Real

  News & Politics
The World
Oct. 22 2014 2:05 PM Paul Farmer Says Up to Ninety Percent of Those Infected Should Survive Ebola. Is He Right?
  Business
Continuously Operating
Oct. 22 2014 2:38 PM Crack Open an Old One A highly unscientific evaluation of Germany’s oldest breweries.
  Life
Education
Oct. 22 2014 4:45 PM Welcome to 13th Grade! Several Oregon high schools are offering a fifth year of high school. Every district should consider it.
  Double X
The XX Factor
Oct. 22 2014 4:27 PM Three Ways Your Text Messages Change After You Get Married
  Slate Plus
Tv Club
Oct. 22 2014 5:27 PM The Slate Walking Dead Podcast A spoiler-filled discussion of Episodes 1 and 2.
  Arts
Brow Beat
Oct. 22 2014 4:10 PM Skinny Mark Wahlberg Goes for an Oscar: The First Trailer for The Gambler
  Technology
Future Tense
Oct. 22 2014 5:33 PM One More Reason Not to Use PowerPoint: It’s The Gateway for a Serious Windows Vulnerability
  Health & Science
Wild Things
Oct. 22 2014 2:42 PM Orcas, Via Drone, for the First Time Ever
  Sports
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.