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Amazon intends to offer long-rumored smartphone for free, according to report

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Amazon Appstore Android (STOCK)
Amazon Appstore Android (STOCK)

An Amazon-made smartphone may be made available to customers free of charge when it launches, according to a new report today. Jessica E. Lessin, a former Wall Street Journal reporter, cites anonymous sources familiar with the retailer's plans, and they say that Amazon wants to sell the smartphone free of charge whether or not it's sold with a carrier contract. It's not yet clear if a subscription to a service like Amazon Prime would be necessary to get the phone, but it seems like such a requirement would be likely. The sources are apparently skeptical that Amazon will be able to pull off a free smartphone, considering the company would have to strike difficult deals with both manufacturers and carriers to make it happen.

The pricing strategy would make waves, but it isn't a wholly new one: Amazon's own Kindle Fire tablets are sold at low cost with the intent to generate profits from app, book, video, and music sales, as well as advertisements. Additionally, cellphones in the US and some other countries are sold on two-year contracts that subsidize the up-front cost of the devices. Some lower-end smartphones are sold for free on contract. Considering any entry by Amazon into the crowded smartphone space would be a challenge, it's possible the company sees a low — or free — price point necessary to gaining marketshare.

Company said to bring its Kindle Fire strategy to its upcoming smartphone

Like the Kindle Fire, it's expected that an Amazon smartphone would run what's known as a "forked" version of Android. The device would use the open-source operating system without any of Google's own apps — including the Play store. This means any Amazon-made smartphone would have to compete directly with other Android devices, and it's said that part of the reason why the company has taken so long to get its phone to market is because many manufacturers have signed agreements to only produce Android products approved by Google.

The last rumors on Amazon's smartphone plans came from The Wall Street Journal earlier this year, and they said that the company was working on two separate devices. A high-end model is said to include a glasses-free 3D display and eye-tracking technology. It's rumored that there will also be a lower-end device.