I think Alistair is the wrong here, Amazon did by no means change their pricing strategy, this is also the USA market we are looking at initially.
This is an odd time to change one’s pricing strategy. Unlike the e-reader and tablet markets, which were extremely open and fast-growing when Amazon entered them, the smartphone market is largely saturated and far more competitive. The heyday of its growth, three or four years ago, is now past.
How will he react when our own media giant launches their own devices tackling their numerous subsidiaries on the e-commerce side? <- speculated
The Amazon Fire Phone is designed around e-commerce where Amazon have active marketplaces.
No, Amazon is not a consumer electronics company. It cares far less about selling devices than it does about reaching its customers. But unless it rethinks its current strategy, it is likely to be stuck with a lot of devices and not very many customers.
Bear in mind that this is aimed at Amazon fans. It has a $100 year of Amazon Prime built in. The entry level phone is 32gig, people are comparing it with 16gig phones. If you look at it objectively, it's actually $150-$200 less than its peers. I still wouldn't buy it, but everyone's quick to overlook the value proposition.
This is Bezos, though - there is always method to his madness. He's better at long-term strategy than anyone in the world, I think. Remember he can always bring the price of the phone down if it's not selling, but if he brings it in as a loss leader or even break-even he could never increase the price.
I really do think he should be pulling a Microsoft and releasing his apps on ALL the platforms though - I'd love that product scanner on my Lumia.