Retail

Amazon Gets Back Into The Phone Biz – With A Twist

Amazon Working On Spotify Clone
Amazon announces deal on its new Android smartphones for Prime members.

Well, as they say, if at first you don’t succeed, try and try again.

Such seems to be Amazon’s attitude about smartphones – as it jumps back into the smartphone sales game. Sort of.  Jump might be too strong  a word – but a toe has definitely gone in to test the waters.

After the $170 million dollar flop that was the Fire phone, Amazon seems to have learned its lesson and will not be making a phone of its own again any time soon. Instead, Amazon will capitalize on Android’s open source, easily modified operating system and offer phones at an extreme discount to Prime members.

Really discounted – at the bottom end, Amazon’s newly released, unlocked Android smartphones are selling for well under $100.

Amazon’s new BLU R1 HD, which comes with a 5″ HD display screen, quad-core processor and 4G LTE speed, can be purchased by Prime members for just $49.99.  Sticker price on the phone is currently $150. The Moto G, which comes with a 5.5″ full HD display, an octa-core processor with 2 GB of RAM and 4G LTE speed, is available to Prime members for $149.99. That is a $50 discount off its $200 sticker price.

The unlocked phones allow buyers to find the wireless carrier and service plans that fit them best, offering customers more freedom and flexibility in the increasingly competitive cellular market and not forcing them to get locked into plans or coverage with any carrier. However, that flexibility comes with a bit of a catch.  The Moto G works on all four major carrier networks (Verizon, Sprint, AT&T, TMobile), but the BLU only works on AT&T and TMobile.

Amazon says the deals offered are 50 percent off the normal retail cost of its Android smartphones.

So why make such a generous offer to users?

One reason, of course, is that it adds another item to the list of inducements that make Amazon Prime desirable – as Amazon is clearly not going to rest until every person in the U.S. (or world) has signed up for its membership program.

But the bigger uses are what Amazon is putting on to those phones.

Ads, for example are an important part of the math. The discounted phones are a new space for Amazon to place ads – behind the lock screen, just like it does with the subsidized Fire tablets and Kindle e-readers. Swipe to unlock and the proud owner of the MotoG or BLU will see a full-screen ad.

Phone owners will also see some apps – specifically the ones Amazon has chosen and pre-loaded for them.  Those apps, unsurprisingly, are the Amazon stable.  The entire stable – not just the shopping app and kindle store that everyone has. Nope – this is the full suite that includes the apps for Amazon Underground app store, Audible, IMDB, and Amazon Video – and the far less commonly downloaded Goodreads, Prime Now, Alexa, Amazon Music, Amazon Drive, and Amazon Photos.

In short – Amazon’s second entry into phone seeks to do directly what the Fire phone was an indirect play at – getting a device into consumers’ hands that made them want to play in the Amazon ecosystem, and hopefully only in the Amazon system.

It’s a big goal – but much more focused than the Fire Phone Version.

And worth keeping an eye on.

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