Shares of Amazon.com jumped nearly $10 in trading this afternoon following the announcement of the device, which will begin shipping on July 25. The stock increased nearly three percent to $334, giving the company a market value of $154 billion. (Correction: The correct percentage increase has been added to this post).
I asked Amazon.com analyst Dan Geiman of McAdams Wright Ragen what he thought of the stock surge, and here’s what he had to say.
“Seems like the phone has some pretty innovative features that make it easier than ever to order from Amazon (note Firefly),” he said. “And I think the Prime offer will drive incremental revenues—I expect in the long run, it will be pretty sticky and something that customers/users will elect to pay for following the trial. On paper, it all appears to be a pretty interesting package. But just to be clear, I think part of the stock’s move has to do with a market rally on Janet Yellen’s comments — which started right around 11:00.”
A 32GB Fire Phone is available for $199 with a two year contract, while a 64GB phone sells for $299. Amazon also is offering a limited promotion in which buyers of the Fire Phone will get 12 months of Amazon Prime for free.
“Fire Phone puts everything you love about Amazon in the palm of your hand—instant access to Amazon’s vast content ecosystem and exclusive features like the Mayday button, ASAP, Second Screen, X-Ray, free unlimited photo storage, and more,” said Amazon CEO Jeff Bezos said today in a press release.
Check our live blog for more updates on the Fire Phone.
Here’s a look at the stock price today: