Amazon is one of the leading brands when it comes to ecommerce. In the fight to take over the top position in the smartphone market, Amazon has fallen scores behind. This Thursday, on a conference call with investors, Chief Financial Officer Tom Szkutak has revealed that they have, in fact, $83 million worth of unsold Fire Phones at hand with no possibility of those ever being sold.
The Fire Phone was first introduced this summer, and was carefully tailored according to the need of the market. Everything was being done in a strategic way, but the price was very high compared to the other phones in the market, which scared off many potential customers. In the already saturated smartphone market, they should have approached with a lower-price strategy, but they ended up pricing their phone at $200 (AT&T exclusive on-contract), and at $700 for off contract (which was still carrier-locked to AT&T).
Later on, AT&T had some troubles regarding ‘moving the phones’, and therefore, it pushed the price to be lowered to $0.99, but customers were still not intent on picking up one of these phones. The low ratings of this smartphone on Amazon were a driving force behind this decision, which resonated with the customers’ complaints regarding the price, unnecessary features and AT&T exclusivity.
Another reason behind the failure of this phone could be its lack of Google services. True, this phone runs on Android, but Amazon has loaded the system with their company-focused apps and App Store for Amazon. Users of this phone did not have any direct access to apps like Gmail, Google Maps, YouTube or any other usual Google services. Instead, useless apps such as Cloud Player and Kindle were included into the phones.
Tech gurus are also blaming the timing of the arrival of the phone in the market. There are many notable and successful brands out there with many generations passed within the past years, whereas Fire Phones have only started their journey. There was always a possibility of being ignored by loyal customers of other brands, which Amazon seems to have overlooked while planning the launch of the Fire Phone.