Following a disastrous 3rd quarter loss ($544 Million), with further expected losses in Q4 2014; Amazon have officially stated that they made a mistake with the Fire phone. Although Amazon haven’t stated that the Fire phone itself was a bade idea, which mainly relies on people’s love for Amazon services to help them buy even more stuff, instead Amazon state that they got the pricing for the phone wrong.
The Fire phone launched at $199 on contract (with a year of Prime bundled for free), however just a few weeks after launch Amazon cut the phone’s price to free on contract, keeping the year of Prime bundled with. Even that however was too little too late to salvage the phone, as it’s cost Amazon nearly $170 million in inventory space. Given how much Amazon love their clean organized storage spaces, and efficient workers it seems to be quite the loss.
Let’s not forget that another factor leading to the Fire phone’s failure would probably be the At&t exclusivity agreement they signed, further narrowing the range of potential customers. Let’s see what Amazon will do next, will they follow ith an improved Fire phone 2.0, or chalk it down as a loss and start a Fire sale on the fire phone?