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  • Amazon Executive Claims Fire Phone was Priced Wrong


    Amazon released their new Fire Phone not long ago, but the demand for the device was lower than what the company had expected. David Limp, Amazonís SVP of Devices told Fortune that the reason behind the low demand was due to pricing. The smartphone was first announced back in July. Apparently, the company has $83 million worth of unsold supply sitting somewhere. According to Limp,

    We didn't get the price right. I think people come to expect a great value, and we sort of mismatched expectations. We thought we had it right. But we're also willing to say, 'we missed.' And so we corrected.
    In September, Amazon made a price cut on the Fire Phone making the 32GB device 99 cents as opposed to its original $199. The discount was announced a day before Apple launched their new iPhone 6 lineup. After the discounted price, Limp said that sales had improved some. Even though the company lost out on quite a bit with their Fire Phone, they are looking to go forward with next generation products. Limp has stated that they would keep working on its software while learning as they improve upon it.

    Source: Fortune
    This article was originally published in forum thread: Amazon Executive Claims Fire Phone was Priced Wrong started by Akshay Masand View original post
    Comments 14 Comments
    1. HovikGas's Avatar
      HovikGas -
      Wow, $83 million... It's just a drop in the bucket for them, but still, what a waste...
    1. exNavy's Avatar
      exNavy -
      Amazon no one wants this phone apparently. My goodness you lowered the price to 99 cents and sales have improved "some"? Consider it the next Dell Axim and walk away already. Stick to books and expanding your marketplace. You do a great job with many other things.
    1. SpiderManAPV's Avatar
      SpiderManAPV -
      Quote Originally Posted by exNavy View Post
      Amazon no one wants this phone apparently. My goodness you lowered the price to 99 cents and sales have improved "some"? Consider it the next Dell Axim and walk away already. Stick to books and expanding your marketplace. You do a great job with many other things.
      Like Amazon fresh. Now there's some potential in that one.
    1. Carvensno's Avatar
      Carvensno -
      Another sad attempt to the 3D screen effects that apparently no one still cares about, plus the fact that no one wants to about every damn thing they search for or about.
    1. jackbauerctu's Avatar
      jackbauerctu -
      You got it wrong with the whole AT&T exclusivity. That's SO 2007.
    1. H4CK3R's Avatar
      H4CK3R -
      I don't understand why Amazon needed a phone just for their store searches and stuff. They could have easily implemented it into their existing mobile apps and saved themselves from losing $83 million.
    1. politicalslug's Avatar
      politicalslug -
      Limited carrier support and lack of Google's Play marketplace are what killed this thing.
    1. Jahooba's Avatar
      Jahooba -
      Limp is right, they totally priced it wrong. This thing couldn't hold a candle to other phones in its price range.

      I read a comment somewhere that said they should have offered the phone for free with an Amazon Prime account. That would have been brilliant. Instead they tried to play it safe.

      You're not going to compete with Apple and Samsung by playing it safe!
    1. ThuD Muffin's Avatar
      ThuD Muffin -
      For what it is, it's a nice phone. But having the Amazon App Store is very much a turn off. Google Play might have made it more successful.
    1. PCYoda's Avatar
      PCYoda -
      It's amazing to me how this story of companies trying to copy Apple and failing massively keeps happening to otherwise very intelligent companies. Notable failures that come to mind:

      Hewlett-Packard - the Touchpad. Originally marketed to resellers and Fortune 1000 companies as a "tablet for the Enterprise" that had better MDM and remote application management features than were available for the iPad at the time (at the time, Enterprises had to provision apps through tethering to Macs/PCs and iTunes; there was no cloud-based app installation process). The company departed from that strategy at launch, decided to flood the market, including consumer retail shelves, with inventory, and priced the units (which were arguably underspec'd compared to the iPad) at the same pricing as comparable storage capacity iPads. I think if HP had stayed the course of launching just in the Enterprise and Education spaces they'd have been wildly successful, but instead, the Touchpad flopped, and one of their largest retailers (Best Buy) threatened to return all their inventory, after which HP price protected the inventory to less than half the initial price, discontinued the product and fired their CEO.

      Microsoft - the Surface, in particular the Surface RT. Microsoft thought they could create the same integrated ecosystem Apple had in the form of Surface RT. Except the fact that their marketing department failed to name the RT OS anything other than "Windows" - which just created consumer confusion ("why can't I install this app on this thing? It says made for Windows!"). They also decided not to leverage their resale channel, only selling the product through their retail stores, online store, and very select retail big box stores like Best Buy - whether they did this to emulate Apple (Apple initially didn't, and still doesn't for a lot of their channel, allow any but a very select few sell iPad products), to exercise control, or because they thought it'd mitigate claims of unfair competition from their hardware partners (like HP and Dell), this was a massive mistake. Market confusion + no channel sales = massive fail. I'm sure the consistent failures with early versions of Surface didn't help Steve Ballmer either, and he's no longer CEO.

      Amazon - the Fire Phone. This product never truly made sense to begin with. Other online services had launched and failed ahead of it - remember the Facebook phone? Other products didn't do well when locked to AT&T - while the iPhone had plenty of success initially in getting people to begrudgingly switch to AT&T, it truly soared once that link was severed and Verizon joined the party (and now with T-Mobile and Sprint driving down data plan prices, even people that didn't really consider smartphones are buying smartphones, whether the iPhone or otherwise.) Even in the AT&T days of the iPhone, users en masse across the globe clamored to jailbreak and unlock them. They also failed to capitalize on their market - why not just give the phone away for $0 down to Prime customers? Assuming they're trying to do the Amazon phone for two obvious reasons - promoting Prime membership and its features and gathering valuable data on consumers - they could have had a golden opportunity, particularly if the phone wasn't locked to AT&T, to create a $0 down financing program akin to T-Mobile's JUMP program to put an unlocked phone into every Prime customer's hand. Instead, they followed the HP route of mass marketing and price matching with Apple, as well as the Microsoft route (although moreso by the design of their company than on purpose) of having no other sales channel aside themselves. There was no way this phone would succeed, but the good news is that Jeff Bezos is probably very secure in his job unlike the other two scenarios.
    1. mwhite67's Avatar
      mwhite67 -
      it should have been $8
    1. scroogelives's Avatar
      scroogelives -
      Think the name had a bit to do with it as well
    1. WHUDS's Avatar
      WHUDS -
      Wife had a fire tablet for a year and hated the Amazon UI, we sold it and bought an IPad, she installed the amazon app and now she feels like she has a great tablet, she laughed at the phone and said that she bets its unusable with the amazon UI
    1. edwilk55's Avatar
      edwilk55 -
      Are they they only ones that didn't know it was going to fail...everyone else said it would.