Online retailer Amazon slashed the cost of its Fire Phone to just 99 cents from its contract price of US$200 on Monday.

After two months of the phone being on the market, Amazon opted to drop the price of the handset to less than a dollar, providing the buyer is willing to sign a two-year contract with exclusive carrier AT&T.

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"If history is any indication, this doesn't usually work," said Wayne Lam, a senior analyst with IHS Technology.

He noted that the so-called Facebook phone quickly dropped to 99 cents last year but never gained a market foothold.

Although the price of the Fire Phone is minute, AT&T's cheapest contract has a monthly rate of US$60. Add the cost of the handset and the whole deal will cost the subscriber a total of US$1,440.99 over the course of two years.

Amazon has a habit of cutting the prices of its hardware as it anticipates consumers will purchase the items and order enough of other merchandise from Amazon to make a profit, or at least break-even, said the New York Times.

Individuals that buy the Fire Phone will still receive  a free year on the site's shipping and video club, Prime, which costs US$99 on its own.

The phone sports a 2.2 Ghz quad-core Snapdragon processor; 2 GB worth of RAM, a 13-megapixel back camera and a front camera.

The phone also has a unique dynamic perspective feature that  offers a 3D representation of the content being viewed on the screen.

The dynamic perspective uses four cameras found at the four corners of the device to track the user's head movements and adjust the image being shown to produce a simulated 3D effect.

Fire Phone also has a Firefly feature that can be used to scan barcodes, CD's, book covers and more.

There's also an audio-recognition component to identify songs in the environment. The feature can listen to the dialogue of a TV show and can name the series and even give access to the specific scene on Amazon.

The user is also asked if he wants to buy the content.

TagsAmazon, amazon fire phone, fire phone