This allows consumers to get a discounted Android phone in exchange for seeing ads on the lock screen. It is a great way for shoppers to save money, while Amazon makes money from the ads -- win/win
Ad spending in the US was $200billion in 2016, for a US labor force of 160mil. That's basically an annual $1200 tax on everyone for the privilege of having ads shoved in their faces.
Win / win / lose.
It's "Win" for Amazon, "Win" for consumers who get a subsidized phone, and "Lose" for consumers who pay money for advertising that gets siphoned off into the advertising middle-men and a small fraction of it trickles back down to consumers.
And hey, as tagged advertising gets better and better, reaching its final form where it only hits people who make a purchase, then each consumer will get the joy of subsidizing their own phone as well as the ad industry execs who piggy-back on top!