Amazon Doubles Up on Cellphone Stores

Although it already has a store for selling cellphones and other wireless communications products, Amazon.com has launched a new site targeting the same market.

AmazonWireless, currently in beta, only carries phones from AT&T and Verizon Wireless at the moment, but other carriers will be added later.

All phones sold on AmazonWireless come with a new two-year contract, but Amazon.com plans to add phones without a plan to the mix.

The new store is meant to streamline the process of buying cellphones for customers.

“AmazonWireless offers easy shopping without rebate hassles and free two-day shipping on all orders,” spokesperson Stacey Page told the E-Commerce Times. “We’ve also eliminated the technical jargon that customers often face when buying a phone.”

Lots of features are still not available. These include new family plans and additional lines for existing plans. AmazonWireless also does not carry phones without plans, although Amazon offers such plans through its other cellphone sales operations.

These issues will be addressed, Page said. “During this test phase, we’re also working hard to add capabilities our current store does not have.” She did not elaborate.

Penny Phones

AmazonWireless offers more than 130 phones from Verizon and AT&T.

T-Mobile and Sprint will be added soon, Page said, though she declined to disclose further details.

“During this beta phase, we’ll be testing different features and gathering input from customers to ensure Amazon.com provides the best possible shopping experience for our customers,” Page said. There is no deadline for ending the beta.

“When customers tell us the shopping experience meets the bar they’ve come to expect from Amazon.com, we’ll officially launch the site,” said Page.

Amazon is apparently sensitive to the adage that haste makes waste.

“The key is to get the experience just right,” IDC analyst Ramon T. Llamas told the E-Commerce Times. “Selling wireless phones online is still a new concept for most people.”

The new store offers some of the latest model cellphones at deep discounts.

These include phones offered for one US cent each, with a $250 discount from AmazonWireless and a two-year contract.

One-cent phones from AT&T include the Samsung Eternity a867; the BlackBerry Curve 8900; and the Nokia E71x, a BlackBerry look-alike. All three are in black, and are listed at a retail price of $399.99.

The one-cent phones from Verizon Wireless include the LG Voyager VX10000 in titanium; the BlackBerry Curve in silver, and the Motorola ZN4 Krave in black, all listed at $399.99.

The deep discounts on cellphones are nothing new for Amazon — it already offers one-cent phones at its existing cellphone store — and, again, customers must sign up for two-year plans.

No Such Thing as a Free Lunch

Here’s the catch — all phones must be on a new two-year contract, and the buyer must keep them for at least 181 days.

Buyers cannot upgrade their phones or downgrade their plans during this period, and they must not cancel required plan options such as data features for the BlackBerry. Also, they must pay their monthly bills on time.

Failing to do so will trigger additional charges from AmazonWireless of up to $250 per device, plus applicable taxes.

Will AmazonWireless cut into sales at Amazon’s existing cellphone store?

Page would not say. “For now, we will continue to offer a wide selection of cellphones with service, unlocked phones, prepaid phones and accessories in Amazon.com’s Cell Phones and Service store,” she said.

The two stores can coexist and will boost Amazon’s business, contended IDC analyst Ramon T. Llamas. “It’s a wise move for Amazon — they realize that wireless is important and is taking off.”

The Cell Phones and Service Store also offers both locked and unlocked cellphones; prepaid cell phones; Bluetooth headsets and other wireless accessories; mobile broadband; and cellphones from a variety of manufacturers.

Unlocked cellphones can be used on any carrier’s service. These are normally more expensive than locked phones, which are subsidized by the carrier, but Amazon offers them at a discount — although some of them come without a warranty.

More Grist for The Mill

The launching of AmazonWireless is a win-win for the online retailing giant and wireless carriers, said Julien Blin, principal analyst and CEO of JBB Research, said.

“It’s a natural evolution. Amazon can leverage its smart search engine and peer-to-peer recommendation features to make it easier for customers to buy new phones,” he told the E-Commerce Times. “Carriers will see it as just another distribution channel and a new revenue opportunity.”

That’s just how Verizon Wireless sees the situation. “We have a number of agents and indirect agents, and AmazonWireless is just one of them,” Verizon Wireless spokesperson Brenda Boyd Raney told the E-Commerce Times. “From our perspective, it means more opportunity to be where our customers shop.”

It also means an opportunity to make more money. “The key for carriers is distribution and reach,” IDC’s Llamas said. “If you’re working through a third-party vendor online, the idea is to get consumers attached to your network. That’s where the money gets made.”

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