Amazon wants to get into the cell phone business and is discounting the BlackBerry Torch to $99, which is 50% less than any other retailer. So how is Amazon going to make any money? Well according to the WSJ, Amazon is getting rewarded by AT&T for every contract it sells. Whatever the situation, Amazon is on the attack and wants to sell more BlackBerry Torches than any other retailer.

In the WSJ article it also stated that:

Contrary to other reports, Amazon hasn’t dropped its price — Amazon has discounted the Torch to $99.99 since the phone launched Aug. 12.

“That is indeed correct — since launch, we have offered the Torch for $99.99,” said Amazon.com spokeswoman Stacy Page. “As in all Amazon.com product categories, we work consistently to maintain competitive prices on AmazonWireless.”

On the cellphone section of its website, Amazon is currently offering a range of phones for as low as a penny, including the Blackberry Bold and some popular Android devices from HTC, LG and T-Mobile. In addition, Amazon is offering free activation of the Torch, worth up to $36 to consumers who upgrade or sign a new two-year contract before Aug. 31.

Still, the low price can’t be good for BlackBerry-maker Research In Motion or for its other retail partners who are retailing the device at far higher prices. Best Buy and Radio Shack are currently offering the Torch for $199.99, while Wal-Mart is selling it for $179.99, with a two-year contract.

The low price for the Torch undermines the message from RIM that the Torch is a high-end product that commands a premium price. And it will put pressure on other retailers to slash their prices.

My goodness. Consumers are actually going to be given a phone at a price that actually reflects the true cost of the product. The inflated retail price of  $649.99 is ludicrous. $99 for any phone that is made in China is closer to the actual cost of production.

Comments welcome.

Source – Amazon link is here

Source – WSJ