When Amazon introduced the Fire phone in the U.S in July this year, the intent was to revolutionize the handset market. That decision appears to have backfired.
Sales of the Fire smartphone which Amazon hasn't discussed publicly have been dismal, according to the company's top executive.
The top online retailer, Amazon, last week acknowledged that the company took a $170 million charge, mostly associated with the Fire phone and related supplier costs. Amazon's CTO Tom Szkutak accepted for the first time that the company had a huge surplus of $83 million unsold handsets.
Those indications, obviously, cast a shadow over what they had originally hoped for. The reason could be down to a few factors, but blame can chiefly be placed on the wrong pricing.
Now, in an interview to Fortune, Amazon's senior vice president of devices, David Limp, openly accepted Amazon's wrong pricing strategy in respect of the Fire phone. "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."
Amazon has instead, decided to sell the Fire phone for a US$690, a product that featured underwhelming specifications. Another possible reason for the Fire phone debacle could be down to lack of confidence in the hardware. The device was largely targeted at Apple fans. However, the device was itself so bizarre that it could not find support of large users.
Back in September, the company had to slash Fire phone's price from $199 to 99 cents. Limp also pointed that due to buggy software issues consumers' interest in the device further diverted.
As of now, the company has no plans to launch the second-generation Fire phone anytime soon. But Limp claims Amazon will continue to support the original Fire phone.
Stay tuned to GizBot for more updates!