I’m reading Amir Efrati and Jessica Lessin’s article about Amazon toying with the idea of giving a free smartphone to people.
Of course there’s a real issue here with the cost of the device: “Offering a phone for free would be a daunting proposition. Amazon would have to find a way to make up for the cost of manufacturing — on average, $200 per smartphone.”
In 2010 I had a good source saying that Amazon was trying to figure out how to give a free Kindle to its Amazon Prime members – the best and most loyal Amazon customers who pay a yearly fee for free shipping and (now) premium digital content.
They had the same problem then – they’d do it, said my source, “Just as soon as they can work out how to do it without losing money.”
I’m not sure they’ll ever figure it out. Hardware costs and software development isn’t cheap. And if the product sucks because the hardware is dated or the software is iffy, then people won’t really want it. The kind of customer who’ll live with a sub par free product probably isn’t who they’re targeting.
Still, it’s a tantalizing idea, and one that clearly keeps coming up at Amazon HQ.
Uncrunched 