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?