Did AT&T Force Amazon to Give up on a Budget-Priced Kindle Phone?

Amazon-Appstore-for-AndroidThere's a new rumor going around today that Amazon's deal with AT&T for exclusivity on the Fire Phone may just have killed the budget model which many of us would have bought.

When Amazon launched their smartphone a few months ago, many pundits were surprised that the $649 Fire Phone wasn't accompanied by a budget-priced sibling. Plausible rumors had been circulating since at least the previous October that Amazon had two models in the works, and the retailer has a history of going for budget-priced hardware, but they only launched a single expensive model.

And now we might know why.

According to a rumor reported in The Information, Amazon was talking about developing a budget smartphone with HTC (and possibly even buying the company, like rumors suggested) but that fell through when AT&T stepped in. The telecom reportedly pressured Amazon with the threat that AT&T wouldn't support Amazon’s higher-end Fire Phone if it didn't get an exclusive on the budget phone as well.

I can't see what details The Information offers to back up this rumor (the story is behind a paywall), and so I can't say whether this rumor makes any sense.

But based on what little I can see outside of the paywall, it doesn't make any sense.  This rumor claims Amazon passed on launching the cheap smartphone everyone would have bought because they had already agreed to give AT&T an exclusive on the expensive model.

My problem is that I don't see why  Amazon didn't just walk on the exclusivity deal. That would have enabled Amazon to sell both models. What's more, it would have let Amazon sell to everyone who wanted to avoid AT&T.

I for one would have bought that budget smartphone, but I'm not paying $649 for the Fire Phone. I don't need that much of a phone, and I don't need the 3d gimmick, and I sure as heck don't want to be tied to a contract with AT&T.

And I am probably not the only one to feel that way. Given that the subsidized price of the Fire Phone was just slashed to under a buck, it would seem that Amazon made the wrong choice here (assuming the rumor is true).

What do you think?

About Nate Hoffelder (11466 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader: "I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

6 Comments on Did AT&T Force Amazon to Give up on a Budget-Priced Kindle Phone?

  1. I don’t mind AT&T, but don’t want any contracts on any phones. If Amazon produced a low price non contract model, I’d certainly consider it.

  2. As far as I can tell, a phone designed for AT&T’s 4G network will only work with them (or their subsidiary, Cricket Wireless) or T-Mobile as they use HSPA+. Sprint’s WiMax and Verizon’s LTE would require different or additional hardware. You should be able purchase an unlocked Fire Phone and shop for a contract free experience (with AT&T, Cricket, or T-Mobile).

    I too would have been interested in a budget Fire Phone. I don’t need 3D, FireFly, or Mayday, and surely without those features they could deliver a more boring phone for less money. I wound up getting a Moto G through Republic Wireless and it meets my modest requirements very well.

  3. I thought the Fire Phone was the budget model; but overpriced 😉

  4. I’d like them all to just be dumb pipes and get out of the way of progress.

  5. I would have rather seen Amazon dump the high end phone altogether (if you want that high end, you get an iPhone) and just offer a budget phone that had their content integrated into the interface and that was not tied to any carrier. I would not lock myself into an AT&T contract, I don’t need high end technology on a phone (not a big phone person), I don’t need 3D, and Firefly is really just a benefit to Amazon to try to get some sales and nothing to me as far as a feature goes (it should help subsidize a phone and not justify the price of a high end phone). I have a smartphone and it works just fine and I have an inexpensive plan that my family shares. The only thing that might get me to switch would be an inexpensive phone that had my Amazon content more easily accessible that would have been compatible with my current plan. I figured that wouldn’t happen, but what Amazon produced didn’t even come close.

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