Smartphones, cell phones with full texting and internet capability plus the ability to run apps, have made calling-only flip phones nearly a thing of the past. But smartphones are much more expensive than regular cell phones, though usually available for very little or even free if a new customers signs a two-year contract with a cell phone carrier. Online shopping powerhouse Amazon may be on the verge of turning the smartphone world upside down with its own smartphone that will reportedly be irresistible due to a certain feature: It will be free.
According to a report from journalists Amir Efrati and Jessica E. Lessin, Amazon is gearing up to release its own smartphone, and trying to figure out if they can actually give it away for free. It is not clear, however, what the “catch” will be, if there is to be one. It is unlikely that Amazon could afford to give away smartphones, which cost around $200 each to manufacture, for free without getting something out of the deal. They may require something from customers in return, like signing up for their Amazon Prime service, perhaps. But according to Efrati and Lessin, Amazon does not intend to require signing up for cell phone service as part of the deal.
News of Amazon’s smartphone was first heard about two years ago. The smartphone would likely be a modified Android phone. Amazon’s e-reader, the Kindle Fire, runs a modified version of Android that allows and disallows certain Android apps. It is likely that an Amazon smartphone would be similar. In this way Amazon could tempt smartphone owners to buy apps through Amazon’s own online store, including e-books and digital media which are likely to be usable on the smartphone.
A free smartphone from Amazon would allow them to grab a chunk of the marketshare from current leaders, Apple and Samsung. Both companies would have to do something dramatic in response to a free smartphone from Amazon. Apple is already planning to announce a new, lower-priced iPhone model shortly. Samsung sells numerous Android smartphones and tablets and are currently the world leader in smartphone sales. Part of the reason for this is because they sell a range of smartphones from low-end models that retail at about $150 to high-end phones with all the bells and whistles that cost hundreds of dollars more. One advantage that Samsung would have over an Amazon smartphone is that their Androids run the full Android operating system, with all Android apps available. If they don’t lower prices, they may promote this fact heavily.
Whether or not people will jump on the chance to get a free smartphone from Amazon will depend on several factors. Will the Amazon phone be as reliable as other models? What will be required to get the smartphone for free? Some people who are currently under contract with their current cell phone provider may be unwilling to switch until their contract expires. It’s likely that non-smartphone users would be the main takers of a free smartphone offer from Amazon, at least in the beginning. This could mean that those old flip phones will suffer the most, with smartphones becoming available to nearly everyone.