Alistair Barr @alistairmbarr, USA TODAY
USA TODAY - Amazon.com Inc likes to keep prices low, but not that low.
The world's largest retailer has been rumored to be working on a smartphone of its own for years. The latest report said the company may offer a phone for free, whether or not people sign up for a new wireless plan at the same time.
However, Amazon spokesman Drew Herdener quashed the idea on Monday.
"We have no plans to offer a phone this year, and if we were to launch a phone in the future, it would not be free," Herdener said in an email to USA Today.
Still, the report suggests Amazon may be using the same strategy with phones as it took when it launched tablet computers a few years ago: sell the devices at cost and make money on the content that users buy with the devices.
Amazon is likely to refresh its line of Kindle Fire tablets later this year, in time for the holiday shopping season, when the company generates most of its sales. These devices undercut iPad on price.
Such strategies aim at the heart of Apple, which makes a lot of its money selling expensive gadgets like the iPhone and uses content from iTunes to drive those device sales.
Apple is expected to change tack a bit on Tuesday when it launches a cheaper version of its iPhone, mainly for sale in fast growing, developing countries like China.