AMZN Amazon.com Inc

By Joanna Stern 

In life, you get what you pay for.*

*Exceptions: Costco wine, $1 New York City pizza and the Blu R1 HD smartphone, now sold by Amazon for $50. In those cases, the quality of the product far exceeds your low expectations.

Yes, you read that right, there's an Android 6.0 smartphone that costs less than family dinner at the Olive Garden. It's cheap, but it's not, you know, cheap.

There's a reason for that. Even though Amazon sells the R1 HD for as little as $50, on the open market it starts at $100. Why the discount? Ads. Sorry, "special offers." Which are ads.

If you're an Amazon Prime member, you pay $50 (plus an extra $10 if you want more memory and storage), and on the lock screen, you see a rotation of promotions similar to what appears on Amazon tablets and e-readers. The shopping giant knocks down the price knowing it will make back the money and then some.

Either way, it's cheap compared with an iPhone or Galaxy, because of Blu, the most interesting U.S. phone brand you've never heard of. With a lean operation, close ties to its Chinese manufacturing partners and a very small marketing budget, the Florida-based company offers unlocked phones for little more than it costs to make them.

It's got the makings of a great SAT question. The R1's materials cost about $70 to $75, according to IHS analyst Wayne Lam's back-of-the-napkin math: $20 for the screen + $6 for both cameras + $7 for memory + $40 or so for the battery and core electronics. The Samsung Galaxy S7 retails for a starting price of $650, but its bill of materials? $225! That's not exactly an even comparison, Mr. Lam points out, since premium phones cost more to develop and market, but you get the idea.

So, are most of us paying for too much phone? That depends on you. The R1 is certainly no Samsung Galaxy S7 or iPhone 6s. It isn't even a $350 Google Nexus 5X or $200 Huawei Honor 5X. But if you're looking for a phone for a tweenager or for an international trip or even as a temporary replacement until you can get a better device, you'll be surprised at what less than $100 will buy you.

What You Get

No, the R1 doesn't feel or look like a premium phone, but it also doesn't feel like something you'd find on a Toys "R" Us shelf. The metal frame and the touch screen's curved edges give it a weighty feel, while the black plastic casing is more firm Coke bottle than flimsy ShopRite water bottle. Even the power and volume buttons have a satisfying click.

The 5-inch, 720p screen is very bright and viewable at multiple angles, even outdoors. It's not as crisp as the 1080p displays you'll get on $200 Moto G4 or Honor 5X, but again...$50.

Actually, make that $60. For $10 more you can double the storage to 16GB and the RAM to 2GB. I've been testing the $60 model and suggest you spend the extra Hamilton for the memory boost alone.

Loading and scrolling through websites and my image-heavy Facebook, Twitter and Instagram feeds has been startlingly smooth. There's been no delay banging away on the keyboard when sending an email, either. Even streaming video on Netflix and YouTube has been a breeze.

Start throwing more graphics-intensive apps and games at the R1, however, and it calls a timeout. It couldn't handle Pokémon Go's augmented reality, and the game crashes more frequently than when I play on a faster Android device. "Angry Birds 2" was playable but also had periodic slowdowns.

Here's the real upside to that low-end processor and screen: solid battery life. I had no issues making it through the day with regular use. In my lab stress test, which cycles through a series of websites at uniform screen brightness, the R1 lasted 7 hours and 40 minutes -- 30 minutes longer than the Galaxy S7.

What You Don't Get

So where does Blu cut corners? Look no further than the 8-megapixel camera. The nicest thing I can say about it is...that it's there. Even my 10-year-old Canon takes better pictures. If the stars align, with decent lighting and a very steady hand, the best R1 shot you can hope for is one that's in focus, but as washed out as a pair of old jeans.

The R1's front-facing 5-megapixel camera is worse. (At least my Snapchats already looked like a filter had been applied to them.)

There are small but significant sacrifices, too. You aren't able to connect to faster 5 GHz Wi-Fi networks, which many new routers also use, and the speaker is so low-volume, it sounds like it was made for a tiny mouse that lives inside it. On the plus side, call quality was OK -- just avoid that speakerphone.

Another thing: You can't use this with Verizon or Sprint service. Though the Blu R1 HD is a 4G-compatible unlocked phone -- great because you aren't bound to a carrier -- it can only work with GSM carriers, mainly T-Mobile or AT&T. I bought a $30 prepaid T-Mobile SIM card, popped it in and was up and running.

Then there are those ads on the lock screen. If you have no other notifications, an ad takes over the entire screen like wallpaper. Otherwise, they appear alongside other notifications.

You might just swipe them away and move on. Me? I got annoyed. I'd rather put my own adorable puppy on the lock screen than look at the one in the Iams dog food ad.

Even more frustrating: You're logged into all of Amazon's core apps (Kindle, Music, etc.), yet the ads aren't yet tailored to your interests. A dietary supplement? If you're trying to tell me something, Amazon, I don't like it. Amazon says the ads experience will become more refined over time.

While I'm fine with Amazon targeting ads based on its own services, I did have concerns about how much access it had to data from my most personal device. Amazon assured me that it doesn't collect information from third-party apps, your location or your Google history to target advertisements.

What You'll Get Elsewhere

Whether or not you can live with the Blu R1 HD, even its so-so performance and terrible camera, the $50 smartphone does us all a favor. It gives us a baseline to understand just how much phone we may need.

Moving up to $200, the new Moto G4 offers a better 1080p screen, camera and performance. (Amazon Prime subscribers can get it for $150 -- with ads.) I also like the $200 Honor 5X, which has a fingerprint sensor and takes better photos. Closer to $400, you hit a sweet spot. The $350 Nexus 5X and the $400 One Plus 3 keep the 1080p screens but are speedier and have much better cameras.

For the best of the best, $650 gets you the Samsung Galaxy S7, with a superb design, a super-duper screen, great camera and speedy performance. There's also, of course, that new iPhone on the horizon.

So yes, if you pay more, you will get more.*

*But seriously, $50!

Write to Joanna Stern at joanna.stern@wsj.com or on Twitter @joannastern

(END) Dow Jones Newswires

July 19, 2016 15:38 ET (19:38 GMT)

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