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Amazon will start subsidizing Android phones with ‘special offer' ads on the lock screens

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Would you deal with more ads for a deal on your smartphone?

Amazon today said it would begin offering Prime members significant discounts on select unlocked Android smartphones, in exchange for the ability to pre-install Amazon apps and show customers more ads on the phones.

Right now the deal only applies to two smartphones — the new Motorola Moto G and the BLU R1 HD — neither of which is available yet in the US, but are expected to ship on July 12th. The lock screen ads are not dissimilar from the ads that appear on Amazon's Kindle e-readers and Kindle Fire tablets with "special offers," as Amazon calls them.

But it's the first time that Amazon has subsidized non-Amazon devices with its special offers ad platform, and it underscores Amazon's commitment to selling its services — even if it means showing up in potentially obtrusive ways on inexpensive or commodity hardware. (Amazon didn't show ads on its own Fire Phone, which was almost unanimously deemed a flop.)

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First, a little bit about what these ads will look like: As with on Kindle and Kindle Fire tablets, the ads will appear on the lock screen of the smartphone. But they'll also appear below notifications that pop up on your lock screen. So, if you get a Gmail or Facebook notification, an ad will show up below that.

These aren't just Amazon ads driving you to buy more Kindle books; ads from other marketers will appear as well. The ads can be swiped away or dismissed, but you can't control the frequency of the ads that appear. In terms of user data, Amazon says it will report standard attributes, like whether customers clicked on an ad or went on to buy something based on an ad, but insists that no personal data about smartphone users will be shared with third-party advertisers.

There's another catch, though: Amazon will also install a bunch of its own apps on the phones, which can be removed from the home screen but ultimately will remain on your phone. This is what is not-so-affectionately referred to at The Verge as crapware — which you can normally avoid by buying an unlocked phone, except, well, these are unlocked phones.

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In terms of what kind of discount consumers will get for all of this, it varies. You'll have to be a Prime member to get the smartphone deal, so factor in that $99 annual fee (which also includes a bunch of other stuff, of course, like fast shipping and streaming video). In some cases the discount may be up to 50 percent off the cost of the unlocked smartphone; the new smartphone from BLU, a Florida-based phone manufacturer, will cost just $50 with ads. The fourth-generation Moto G will cost $150, marked down from $200.

For some people, namely those who are already Prime subscribers and who aren't in the market for a high-end phone, this may very well be worth it. Amazon hasn't shared data on how successful its special offers have been on other devices, but says that the vast majority of its customers have purchased their Kindles or tablets with special offers. So if you take that at face value, ad-supported hardware seems to be a fine trade-off for plenty of customers. And in terms of bloatware, if I had to make a choice I would rather have Amazon services on my phone, many of which I use anyway, than wireless carrier apps.

The subsidized hardware also hints at what Amazon's future strategy may be in verticals where it has not established its own hardware footprint, like phones. This initial launch feels like something of an experiment, but it's possible Amazon could strike similar deals with other hardware manufacturers whose products it sells on its site.

On the other hand, unlocked phones are inherently about choice, and pre-installing non-native software onto devices is the opposite of that. And seeing lock screen ads as frequently as you see notifications could definitely impact the entire smartphone experience — not in a good way.

We haven't had the chance yet to use one of the Amazon-supported Android phones, so we'll report back with more info about the actual user experience once we get a closer look.


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