A few days ago, Amazon announced a reduced-price version of its popular Kindle E-Reader. Agree to have some ads served to your Kindle and you get $25 off the up-front price. Look at it from one angle and this is an old gambit being resurrected: ad-subsidized Internet Service Providers made their big stand years ago, eventually giving way – for the most part – to higher-quality, ad-free services that consumers were willing to pay a little extra for. Look at it another way, though, and the ad-subsidized Kindle is just another spin on the modern way of selling mobile hardware in America. “On contract” pricing is de rigueur in the States, as the cell phone buying public is by and large content to save a few hundred bucks today in exchange for becoming beholden to monthly minimums and early termination fees tomorrow. Where the wireless carriers offer $200 off the cost of a smartphone if you agree to give them $90/month for two years, Amazon is likewise offering $25 off the cost of a Kindle if you agree to deal with ads on your booktop for the foreseeable future.
What if Amazon’s on to something here? What if, somehow, the mobile market is willing to do what the ISP market wasn’t game for a few years back, and accept an ad-laden experience in exchange for a lower cost of ownership? The key difference here is that Amazon’s customers already see value in Amazon’s ads, generally speaking, as witnessed by the success of the online retailer’s Daily Deals, Gold Box offers, and so on. The Net Zeros of the world tried to get folks to pay attention to annoying third-party ads in exchange for free dial-up service, but Amazon is potentially on to something far more clever in upselling a captive audience on something they’ve already said they want: More Amazon. I’ve already taken an amateur crack at imagining some of the possibilities involved with an Amazon tablet computer that offers Web, Email, Apps and streaming video with a side of Amazon Prime and exclusive Daily Deal offers. It’s not hard to imagine folks snapping a gizmo like that up, especially if Amazon can beef up their streaming video offerings and sweeten the pot with a few bucks off of a $79/year Prime membership.
Let’s go one step further, though. Walmart’s huge like Amazon. Even bigger, really, as their online retail arm is still a complement to their unfathomably huge brick and mortar discount business.Walmart sells mobile phones and service plans from the major carriers, they sell tablets, and they even offer their prepaid wireless service via T-Mobile under the brand names “Family Mobile” and “Straight Talk.” Sean sent me some photos from his local Walmart out in Missouri, and mobile gadgets are prominently featured, with big endcap displays showing off iPads and plenty of aisle space devoted to cell phones and phone/tablet accessories.
So what if Walmart decided to up the ante and sell their own mobile hardware, subsidizing the costs of phones, tablets, and even wireless service by pushing ads to users’ home screens and Inboxes? Thousands of people across the US already rely on Walmart for everything from diapers to DVDs, so why wouldn’t they take a second look at an Android phone or eReader/Tablet at a discount price that also offered regular discounts on staples they already buy? And Walmart’s certainly got the buying power and sales volume to wring the lowest price possible out of would-be manufacturing partners to make sure their phone and/or tablet undercut the competition, price-wise.
The Walmart Android phone with Google: It’s like a frequent buyer card that surfs the Web and integrates with your Google Voice account. On the one hand it’s insanely crass and commercial, but on the other hand it makes sense. Especially if it’s compatible with Walmart’s $45/month, contract-free, unlimited voice/text/data plan. And if Amazon can do it, and Walmart could do it, whose to say eBay, or Groupon, couldn’t do it too?
Question is, would you sign up for a wireless service that offered a decent, but not state-of-the-art, Android phone, a great deal on your monthly service, and Walmart ads/coupons/offers pushed straight to your pocket on the regular? Is it worth it? Or is it maybe even a value add, if you already shop at Walmart?