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‚Äôs 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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