Breaking News: Amazon Attributes Poor Fire Phone Sales to High Price
The hot tech news story this morning comes from Fortune, which reported that Amazon has figured out why they’ve sold so few Fire Phones.
Fortune interviewed Amazon Senior Vice President of Devices David Limp, who shared the shocking that Amazon may have made a mistake with the price of the Fire Phone:
"We didn’t get the price right," Limp admitted. "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."
After debuting with a retail of $649 and an AT&T subsidized price of $199, the Fire Phone’s subsidized price was dropped to under a dollar (and a retail price of $449). That hasn’t done much to boost sales, or so a market survey of Amazon Prime members suggests.
Amazon has admitted to sitting on $83 million in Fire Phone stock at the end of the 3rd quarter as well as taking a $170 million loss on the phone in that quarter, but that hasn’t quelled their interest in smartphones.
"We are going to keep iterating software features to get it better and better," said Limp. "Each release that we’re doing, we’re learning. Beyond that, I leave it out there to see what people think."
Amazon has a history of putting out cheap but adequate hardware in order to get customers to use their other services (digital music, book, movie, and app stores), so much so that I was surprised first by the specs and cameras and then by the high price and AT&T exclusive. Neither decision follows from Amazon’s past product decisions, so perhaps if Amazon corrects those two missteps they could sell more phones.