Amazon's Bezos open to paying for Fire phone data through AT&T's Sponsored Data program

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Amazon (NASDAQ: AMZN) CEO Jeff Bezos said that the company might make use of AT&T's (NYSE: T) Sponsored Data program to subsidize the data costs of its Fire phone users. Bezos said Amazon would do so "if customers are interested in that. It is something we would look at in the future," according to Re/code.

Bezos' comments are notable in light of a report last month from BGR that indicated Amazon was considering offering a "Prime Data" service alongside its smartphone in an effort to make access to its Prime content services free for members of its Prime subscription offering. The BGR report on Prime Data was posted a month before Amazon released its Fire phone--much of what BGR reported about the phone turned out to be accurate, except for the reporting on the Prime Data plan.

After launching its Fire phone, Amazon's Bezos conducted a number of interviews with the likes of Re/code and others, discussing the strategy and planning behind the phone. Here are some of the topics he addressed:

  • On whether Amazon will sell its Fire phone internationally, Bezos told Re/code to "stay tuned."
  • On whether Amazon will record a loss or will break even on the Fire phone, as it has on other devices, Bezos told the Wall Street Journal that "We haven't changed our approach. We have packed the Fire phone with premium materials, the industrial design is very high end. The $199 price point with a two-year contract is for the 32 gigabyte model, not 16 gigabytes. So we have taken a very aggressive price point position on this, plus the 12 free months of Prime."
  • On whether the sole purpose of the Fire phone is to increase membership in Amazon Prime, Bezos told the New York Times that "All of these things are self-reinforcing. The phone will make Prime memberships better, and Prime looks great on this phone. It's not that there's no interaction between these elements. But to say that's the primary purpose is too simplistic."

In summarizing the analyst firm's take on the new Fire phone from Amazon, TBR analyst Ezra Gottheil wrote that "TBR believes the Fire phone won't greatly impact Amazon or the smartphone market. Innovative 3D-like display and tilt controls may work well and differentiate the phone from offerings from Apple or Android OEMs, or they may prove to be an annoyance and battery eaters. Even if successful, TBR believes they don't radically improve the phone's interface and won't draw many buyers away from other vendors, especially in the now-mature U.S. smartphone market, which is Amazon's initial target due to the United States having the largest install base of Kindle Fire devices and Amazon Prime subscriptions."

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