Amazon Puts Out The Fire Phone
Smartphone was a rare but major miscalculation by the savvy online retailer.
All companies make mistakes. Yet one of the biggest in the consumer devices arena is Amazon’s much-hyped but spectacularly unsuccessful Fire Phone. It now appears the company is discontinuing it.
According to multiple reports, Amazon has Fire-d engineers (the puns are difficult to resist) and decided that it won’t be able to compete as a smartphone OEM — although there’s always the possibility that the company will return with another device in the future.
Amazon’s Kindle and Kindle Fire devices have been very successful, so it was logical for the company to think about developing a smartphone. Launched in June 2014, the phone sought to differentiate in a crowded Android field with what were arguably gimmicks (e.g., 3-D screen) and Amazon services (unlimited cloud photo storage, free year of Prime).
All that might have worked had Amazon followed its Kindle Fire pricing strategy and made the phone inexpensive to own. But its relatively costly pricing was probably the great miscalculation. The phone entered the market with iPhone-level pricing ($650 unlocked). That and the lack of meaningful differentiation made most stay away. As an aside, the Nexus 6 has also sold poorly because Google priced it too high vs. expectations and previous Nexus pricing.
Without meaningful demand, the Fire Phone stalled. By last September, Amazon had aggressively discounted it, making it effectively free with a two-year carrier contract. But by then it was too late. Disappointing sales led to a significant accounting charge and the company’s worst quarterly loss in roughly a decade.
The Fire Phone is no longer available (according to my research) on the Amazon or AT&T sites. However, you can still buy one elsewhere online (e.g., eBay).