T AT&T Inc

Amazon Inc. is back in the smartphone business. No, there is no Fire 2. But the retailer is selling two Android smartphones, one for just $50, subsidized by Amazon ads.

On Wednesday, Amazon introduced its first two Prime Exclusive phones. The Blu Products Inc. R1 HD starts at $50 unlocked; the fourth-generation Moto G, from Lenovo Group Ltd., starts at $150 unlocked. (Without Amazon's discount, the Blu R1 HD costs $100 and up, and the Moto G costs $200 and up.)

As the name suggests, to buy a Prime Exclusive phone, you have to be a $100-a-year (or $11-a-month) subscriber to the Prime service, which also includes two-day shipping, unlimited streaming music, photo storage, and streaming TV shows and movies.

The other not-so-hidden cost: Amazon's apps, services and ads, all over your phone. If you are a dedicated Amazon shopper and streamer, this may be desirable; if you aren't, it could get obnoxious quickly. If you want to kill the ads, you will have to pay back the $50 subsidy.

The ads will appear on the lock screen , directing you to discounts, promos and other offers that the company's algorithms think you will care about. Amazon is also loading these phones up with apps and widgets—shopping, video, music, cloud storage, audiobooks and more—for quicker access to its services and storefronts.

If you get tired of looking at them, Amazon's apps can be removed from the home screen of a phone and disabled in settings, but they can't be deleted.

Perhaps it is obvious, but these phones, at these prices, aren't iPhone killers.

The Blu R1 HD has a 5-inch 720p display, a quad-core processor and an 8-megapixel camera. For $50 you will get 8 gigabytes of storage and 1GB of random-access memory. If you want to jump to 16GB of storage and 2GB of RAM (still a minuscule amount by today's standards), the Prime cost is $60.

The Moto G, with a 5.5-inch 1080pdisplay, an eight-core Qualcomm processor and 2GB of RAM, should be a better performer, albeit for a higher price. The $150 Prime Moto G has 16GB of storage. For $180, you get double that.

Both the Blu R1 and the Moto G feature SD card slots for expandable storage.

One final caveat: Amazon's Prime Exclusive phones are an experiment. Two years ago, Amazon built and sold its own Fire phone. It was loaded with the company's apps and services and featured a 3-D screen trick that tracked your head movements. Two months after its debut at $200 with an AT&T contract, Amazon slashed the price to 99 cents. Amazon took a $170 million hit writing down unsold inventory and gave up on a sequel.

While Prime Exclusive Phones aren't Amazon's own hardware, the spirit of the Fire phone lives on: These subsidized phones are an attempt from Amazon to once again find out whether people want to pay for an Android phone where its apps, services and advertising take center stage.

(END) Dow Jones Newswires

June 29, 2016 22:15 ET (02:15 GMT)

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