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Except it isn't being sold at a low price, and doesn't really offer anything valuable to the customer that differentiates it from the competition. The implicit deal was always the product is sold at cost so they can encourage sales on the store, why would anyone pay full price for this?

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Fair enough, but I suspect the profit margins on this phone are pretty slim, given the hardware features. I think Bezos figured the high end hardware was necessary to initially break into the market.

Agreed. If they initially brand the Fire phone as a high-end device it will seem more valuable when they ruthlessly cut its price=).

It's likely subsidized by the AT&T exclusive. I believe it's $200/month plus some contract. Which means they may be getting kickbacks totaling more than $200/device which would improve their margins. Or more interestingly, mean the device can be higher end and impress people more while at least not being a loss for Amazon. It's basically a store interface, leading to increased sales. Firefly is like Shazam for products, people will likely buy way more from Amazon.

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