Tole Hart

Amazon.com is now offering the T-Mobile G1 at a $98 price tag, much less than it is selling at other channels $180 through the carrier and $150 at Wal-Mart. The new price is now the magic consumer price point of $99. Ninety nine dollars is the price point at which consumers will readily adopt a phone. The new price requires a two year contract.

There are a number of reasons why Amazon wants to do this. It most likely gets an additional channel subsidy for offer this phone as T-Mobile is gaining a highly valued voice and data subscriber, also the G1 services has a direct widget to sell Amazon MP3 which Amazon wants to promote, and it wants to promote the overall use of the internet on a mobile phone which will be beneficial to the company.

T-Mobile is willing to sell the phone at the lower price because it wants to add high value customers in the face of recession as well as competitive products like the iPhone and Palm Pre (which is coming out later this year).

What this does for the market is to provide a highly functional smart phone in the market at a consumer friendly price. The pricing of unlimited wireless data at $24.99 a month which is high for the average user and a more user friendly unlimited data pricing will be the next step to drive this market like per day or advertising sponsored pricing.