Fire Phone flops badly, burns Amazon

fire

Amazon didn’t have a good third quarter, reporting a net loss of $437 million, which is up significantly from the $41m loss it reported for the same quarter last year. Contributing to that loss is the abject failure of the Fire Phone.

Advertisement

My colleague Brian Fagioli described Amazon's handset as Android done differently in his review, and although he liked it, he said it wouldn’t be for everyone. It turns out it’s for hardly anyone.

During the Amazon earnings call, Amazon’s Chief Financial Officer Tom Szkutak said that the company was taking a $170 million dollar write-down "primarily related" to costs associated to the Fire Phone. In other words, Amazon vastly overestimated the phone’s appeal and ordered far too much stock. As Microsoft did with the original Surface.

It’s not surprising to discover that the Fire Phone hasn’t been doing well -- Amazon held a "Fire sale" two months ago when it slashed the price of the device from $199 to just 99 cents (with a two year contract) -- but the scale of its failure is staggering.

Szkutak says as of the end of Q3 Amazon is sitting on $83 million worth of Fire Phone inventory. Ouch.

Photo credit: urfin/Shutterstock

3 Responses to Fire Phone flops badly, burns Amazon

  1. Richard Saunders says:

    I think their single biggest mistake was making it AT&T exclusive.

    Anyways a lot of customers are already used to phones being cheap and/or free after contract, so they weren't exactly being price competitive. And given a lot of people are weary of contracts these days, I don't think many were ready to just hop aboard.

  2. Claudinho85 says:

    if it was stock android it would instantly been 10x better

    • torch4x4 says:

      I agree, forked versions of android with amazon app store instead of google play is not the best option

© 1998-2020 BetaNews, Inc. All Rights Reserved. Privacy Policy - Cookie Policy.