Jessica Lessin is speculating on her blog that Amazon is about to release a smartphone with one radically new feature: It’s going to be free, even without having to sign up for anybody’s service plan. Being naturally cynical, that immediately made me wonder, “How much is free gonna cost this time?”
Jessica’s theory is that Amazon plans to make money just by making it really easy to buy stuff from Amazon. Kinda like the old “Give away the razor, and sell blades” approach.
Is this really where smartphones are headed?
That would certainly cause a major disruption in the smartphone market. If true. If I were to place a bet on that, however, I would bet against it. Maybe Amazon really does have enough money to do something like that, but it seems like a really long shot to me. I don’t think that Amazon really needs to do anything that drastic. They could get nearly the same mileage (and disruptions) out of selling a smartphone at or near production cost (which I suspect is closer to $150 than the $200 that Ms. Lessin estimates), without anywhere near such an enormous writedown. Or risk.
Ms. Lessin does indirectly admit that it’s pure speculation (“Spokespeople for the phone makers declined to comment, referred us to publicly-disclosed information, or never got back to us“). Makes for interesting headlines, and maybe some search-engine love, and I’m guessing that’s what she had in mind, anyway.
One of the reasons that I think that Lessin’s speculation is not necessarily accurate is that she also speculates that Microsoft’s acquisition of Nokia is going to breathe new life into Windows Mobile. I think that Mark Stephens (better known as Robert X. Cringely) has a more logical explanation for that: International money laundering.