Amazon Fire Phone: Was $200, now just 99 cents

The Amazon Fire Phone with a two-year contract now costs less than a candy bar.James Martin/CNET

The Amazon Fire Phone can now be had for less than a buck.

The e-commerce giant said Monday it's now offering the 32-gigabyte version of its first smartphone, which went on sale just two months ago, for 99 cents with a two-year contract, down from $200. One year of Amazon's Prime service is still included as a short-term promotion. A year of Prime, which offers free two-day shipping and streaming music and video libraries, usually costs $99.

Amazon also slashed the price of its 64GB Fire Phone to $100 with a two-year contract, down from $300.

The new pricing for the Fire Phone, offered exclusively through AT&T in the US, suggests soft sales for the device, but could give the smartphone a much-needed shot in the arm, as the device faces tough competition from Samsung, Apple and others. A study last month suggested that Amazon wasn't selling all that many Fire Phones, although the company hasn't disclosed sales figures.

The change should also allay concerns that the phone wasn't priced competitively enough to gain notice against other major tech players. Amazon made waves in the tablet computer market by offering its lower-priced Kindle line, so the $200 price tag on the Fire Phone came as a bit of a surprise to some consumers and industry watchers.

Also Monday, the Fire Phone became available for preorder in the UK and Germany.

The Fire Phone, with a 4.7-inch display, provides two features not found in other smartphones. It offers something Amazon calls Dynamic Perspective, which provides a 3D effect on the phone by using four front-facing cameras that track eye movement. Firefly is another key feature, which uses the rear camera to identify products and bar codes, providing details about over 70 million products and making them readily available for sale through Amazon.

The e-retailer has been investing heavily in an effort to expand rapidly, despite the strategy hurting its quarterly results. In addition to the Fire Phone, the company this year also came out with a new set-top box for streaming videos called Fire TV, as it works to expand its presence with consumers beyond its main website.