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Monday
Nov212011

Bezos Gone Wild! Amazon Selling Every Non-iPhone Smartphone for One Penny



Through next Monday, Amazon is selling all non-iPhones for one penny with a new two-year contract.

Smartphones on sale for $0.01 include the Motorola Droid Razr, which Verizon sells for $299 with a two-year contract, the Samsung Galaxy S II, Epic 4G Touch, which Spring sells for $199 with a two-year contract, and the BlackBerry Torch 4G, which AT&T sells for $99 with a two-year contract.

Amazon seems to be going directly after Apple to try to sell more smartphones this holiday season by offering them at unbeatable prices. Bezos had a similar strategy with the Kindle Fire, which sells for $199 -- compared to $499 for the iPad 2 -- and analysts expect will hit 5M in sales in Q4.

The number of activated Android smartphones and devices worldwide has doubled in six months, from 100M to 200M, Google revealed during the launch of Google Music last week. Google reported during its earnings call in July that it activates 550K Android handsets every day.  

The adoption of Android phones has far outpaced that of the iPhone [ see Mary Meeker slide ]. Gartner reported last week that Android's share of the smartphone market has doubled from 25.3% in Q3 2010 to 52.5% in Q3 2011; the iPhone had 15% of the market in Q3 2011, a slight drop compared to Q3 2010 (16.6%).

Currently, Samsung is the number one smartphone manufacturer worldwide, having reached 24M end users and putting it ahead of Nokia for the first time. Gartner attributed Samsung's success to its Galaxy smartphones. Nokia is still the top mobile phone manufacturer with 28.2% of the market share. Research In Motion, on the other hand, accounts for 3% of the mobile device market share. 

"Android benefited from more mass-market offerings, a weaker competitive environment and the lack of exciting new products on alternative operating systems such as Windows Phone 7 and RIM,"Gartner principal research analyst Roberta Cozza said. "Apple's iOS market share suffered from delayed purchases as consumers waited for the new iPhone. Continued pressure is impacting RIM's performance, and its smartphone share reached its lowest point so far in the U.S. market, where it dropped to 10 percent."

For one week in October 2011 -- around the same time Apple released the iPhone 4S and started offering its iPhone suite at heavily discounted prices -- Amazon sold all Verizon phones for a penny. Many users thought that would mean they could purchase the iPhone for a penny, but Amazon doesn't actually carry the iPhone at all.

Amazon Wireless launched back in July 2009 to sell wireless service plans and devices from AT&T, Verizon Wireless, Sprint and T-Mobile.


From Mary Meeker's presentation on Internet trends