Amazon flatly denies that it is working on a free smartphone

September 9, 2013
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amazon-kindleAmazon has taken the unusual step of directly denying a rumor that it is working on a smartphone which it plans to give away free of charge! In a unprecedented move an Amazon spokesperson denied a report from former Wall Street Journal reporter, Jessica E. Lessin, that the company is planning to giveaway its smartphone and that it doesn’t need a carrier contract.

In the statement released to the Wall Street Journal an unnamed Amazon spokesperson wrote, “We have no plans to offer a phone this year. If we were to launch a phone in the future, it would not be free.”

The fact that Amazon bothered to deny this rumor, something it doesn’t normally do, indicates either that the rumor was a bit too close to the truth and Amazon are trying to maintain the element of surprise, or it is trying to win the expectations game for when it does release a smartphone. If consumer expectations are for a free phone and Amazon fails to deliver then anything it does release could be seen as a disappointment.

What is also interesting is that Amazon hasn’t flatly denied that it is working on a smartphone. In fact it has left the door wide open. The rumor mill has been churning out stories of a pending Amazon smartphone for quite a while now. The rumors have been fueled by events like Amazon expanding its R&D office space and testing a secret wireless network. There have even been reports that the company is developing a phone with 3D display technology.

Although releasing a free phone is not uncommon, the costs of the phone are effectively subsidized by the monthly cost of the subscription. However the Jessica Lessin report implied that the business model that Amazon would use to make the smartphone free wouldn’t involve the carriers. She also noted that Amazon’s plans to release a smartphone have been delayed while the company figures out the economics of a free handset.

How do you see this working? Will Amazon release a smartphone? Will it be subsidized by adverts and a mandatory subscription to the Amazon Prime service? Let us know by leaving a comment below.

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