Amazon to forego future phone development following Fire Phone failure

Posted:
in iPhone edited August 2015
E-commerce behemoth Amazon has reportedly begun to draw down engineering resources in its mobile phone team, shedding jobs and re-focusing efforts on tablets and other home electronics in the wake of the Fire Phone's dismal showing.



While the company has not ruled out producing another mobile phone, development of a next-generation device has been extended "indefinitely," according to the Wall Street Journal. Citing sources, the paper says that dozens of Fire Phone engineers have been let go in what is said to be the first round of layoffs in the history of Amazon's hardware division.

Amazon devices chief David Limp said late last year that the company erred when it chose to put the Fire Phone in the same pricing strata as other flagship handsets, including the iPhone. Even a massive cut to the subsidized cost of the device --?from $199 to $0.99 --?could not drive sales, however, and Amazon was eventually forced to take a $170 million charge related to Fire Phone development and unsold inventory.

That is believed to have forced a re-examination of Amazon's entire hardware effort, leading to the rollback of other ambitious products --?like a smart stylus, a new type of projector, and a jumbo 14-inch tablet --?that had been in various stages of development.

Now, Amazon's hardware group is said to have rededicated itself to home electronics. The recently-released Fire TV and Echo have been generally well-received by buyers, and the company is said to be working on a "high-end computer for the kitchen," continuing a decades-old effort by technology companies to embed computing into what is the most popular room in many homes.
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Comments

  • Reply 1 of 50

    And in other news, the US DoJ is prosecuting Apple because of Bezos' decision to fire engineers working on phones. 

  • Reply 2 of 50

    I would not want one, but it was never really discounted heavily.  Dropping the price from $750 to $550 (to make a zero dollar subsidized phone) is not going to move the phone in the low cost markets or to people who want a phone bought outright. 

     

    Windows phones have been priced down to $200 WITHOUT subsidy.   Basically Amazon didn't even try.  They never fixed the glaring failures with the phone like not having a regular Android market nor did they add many compelling features other then the voice system.  

  • Reply 3 of 50
    Quote:

    Originally Posted by sog35 View Post

     

    LOL.

     

    Amazon - failed

    Samsung - failing

    Microsoft - failed with Nokia

    Google - failed with Motorolla

    LG - about to go bankrupt

    Sony - about to close phone division

    HTC - about to go bankrupt

     

    All the big boys will soon be out of the high end phone game.  All that's left is a bunch of cheap piece of shit phone makers like Xiaomi and even the former CEO of Apple Scully's phones.  LOL.  Middle class Chinese don't want to be caught dead with those POS phones.

     

    By 2022 there is suppose to be 650 million middle class Chinese.  Probably close to 60% will buy iPhones.  That's almost 400 million iPhones sold in China alone.  That is about 160 million a year based on upgrade cycles.

     

    To those haters who said iPhone growth is over.....its just beginning.  China alone will allow Apple to grow iPhone units at 15-20% for the next 5 years.  And after that we have India that will spur on growth for the next 5 years.  We are talking about a decade of solid 15-20% unit growth.




    A lot optimistic but I don't disagree with the direction.  There will not be that many middle class Chinese and even if 40% of them guy with an iPhone on longer upgrade cycles it is still a hell of a lot of phones.  I can see worldwide iPhone sales slowly climbing to 80 million a year with 10% growth.  The profits will be INSANE. 

  • Reply 4 of 50
    badmonkbadmonk Posts: 991member
    sog35 wrote: »
    LOL.

    Amazon - failed
    Samsung - failing
    Microsoft - failed with Nokia
    Google - failed with Motorolla
    LG - about to go bankrupt
    Sony - about to close phone division
    HTC - about to go bankrupt

    All the big boys will soon be out of the high end phone game.  All that's left is a bunch of cheap piece of shit phone makers like Xiaomi and even the former CEO of Apple Scully's phones.  LOL.  Middle class Chinese don't want to be caught dead with those POS phones.

    By 2022 there is suppose to be 650 million middle class Chinese.  Probably close to 60% will buy iPhones.  That's almost 400 million iPhones sold in China alone.  That is about 160 million a year based on upgrade cycles.

    To those haters who said iPhone growth is over.....its just beginning.  China alone will allow Apple to grow iPhone units at 15-20% for the next 5 years.  And after that we have India that will spur on growth for the next 5 years.  We are talking about a decade of solid 15-20% unit growth.

    Thanks sog. Once again you beat me to it. The death of the Amazon phone was going to happen sooner or later. They will all drop to the wayside sooner or later. Even Google will be tempted (though I doubt they will).
  • Reply 5 of 50
    dysamoriadysamoria Posts: 3,429member
    What do people expect? The market is saturated!! People prefer the product that earned (and is burning) its reputation as a fantastic handheld computing appliance for real people (not geeks). Then there's the other product. Every company trying to get into the same level of success with the same type of product is just further clogging up an already saturated market. Then people act shocked. If the new product isn't actually revolutionary, don't expect to do more than reach the few remaining people that haven't already jumped on (or who have chosen to shift platforms).
  • Reply 6 of 50
    jbdragonjbdragon Posts: 2,246member
    Quote:

    Originally Posted by BeltsBear View Post

     

    I would not want one, but it was never really discounted heavily.  Dropping the price from $750 to $550 (to make a zero dollar subsidized phone) is not going to move the phone in the low cost markets or to people who want a phone bought outright. 

     

    Windows phones have been priced down to $200 WITHOUT subsidy.   Basically Amazon didn't even try.  They never fixed the glaring failures with the phone like not having a regular Android market nor did they add many compelling features other then the voice system.  


     

    It was just so much unlike Amazon!  It was Overpriced for a Amazon device.  A device in fact made to get you and keep you and make money in Amazon's Eco System.   Not just for the normal Phone type stuff from others, but anything Amazon sells.   It was like buy our expensive phone so that you can buy a bunch of other expensive stuff real easily!!!

  • Reply 7 of 50

    I did not see that coming....;)

  • Reply 8 of 50
    cornchipcornchip Posts: 1,856member
    Quote:

    Originally Posted by JBDragon View Post

     

    It was like buy our expensive phone so that you can buy a bunch of other expensive stuff real easily!!!


     

    Like a very expensive version of those dumb, stick-on, buy-dongles

  • Reply 9 of 50
    beltsbear wrote: »
    I would not want one, but it was never really discounted heavily.  Dropping the price from $750 to $550 (to make a zero dollar subsidized phone) is not going to move the phone in the low cost markets or to people who want a phone bought outright. 

    Windows phones have been priced down to $200 WITHOUT subsidy.   Basically Amazon didn't even try.  They never fixed the glaring failures with the phone like not having a regular Android market nor did they add many compelling features other then the voice system.  


    To be fair I got mine on "sale" or "special reduced pricing" for $189 Unlocked +FREE Shipping + The 1 year of FREE Prime that comes with buying the phone.

    Only bought it as a bridge between replacing a stolen iPhone.

    The Fire phone was crap and even forcibly running Android OS/Google Play on it couldn't do much for it.


    iOS/iPhone STILL A Far far more preferable platform
  • Reply 10 of 50
    leighrleighr Posts: 219member

    Another "iPhone Killer" bites the dust. 

  • Reply 11 of 50
    tallest skiltallest skil Posts: 43,399member

    Now for Amazon itself to bite the dust.

  • Reply 12 of 50
    dasanman69dasanman69 Posts: 13,001member
    dysamoria wrote: »
    What do people expect? The market is saturated!! People prefer the product that earned (and is burning) its reputation as a fantastic handheld computing appliance for real people (not geeks). Then there's the other product. Every company trying to get into the same level of success with the same type of product is just further clogging up an already saturated market. Then people act shocked. If the new product isn't actually revolutionary, don't expect to do more than reach the few remaining people that haven't already jumped on (or who have chosen to shift platforms).

    There are plenty of saturated markets that have multiple players succeeding, and it's not always the player that came out with the revolutionary product that ends up having the most success.
  • Reply 13 of 50
    sog35 wrote: »
    LOL.

    Amazon - failed
    Samsung - failing
    Microsoft - failed with Nokia
    Google - failed with Motorolla
    LG - about to go bankrupt
    Sony - about to close phone division
    HTC - about to go bankrupt

    All the big boys will soon be out of the high end phone game.  All that's left is a bunch of cheap piece of shit phone makers like Xiaomi and even the former CEO of Apple Scully's phones.  LOL.  Middle class Chinese don't want to be caught dead with those POS phones.

    By 2022 there is suppose to be 650 million middle class Chinese.  Probably close to 60% will buy iPhones.  That's almost 400 million iPhones sold in China alone.  That is about 160 million a year based on upgrade cycles.

    To those haters who said iPhone growth is over.....its just beginning.  China alone will allow Apple to grow iPhone units at 15-20% for the next 5 years.  And after that we have India that will spur on growth for the next 5 years.  We are talking about a decade of solid 15-20% unit growth.
    Wth has Scully been up to these days?
  • Reply 14 of 50
    No surprise. Wrong price point for Amazon to get into the game. And how much R&D and production cost was wasted on the four sensors for 3D Dynamic Perspective gimmick?
    They should have followed the Google root with their Nexus line, and just of had one of the big players (HTC LG, Motorola), design a phone for $299 for them.
  • Reply 15 of 50
    leighrleighr Posts: 219member



    Well said. I always chuckle when the media wheels out (with increasing regularity) the "iPhone Killer" headline whenever another phone comes out. As you said, there's so much more to iPhones than just the iPhone.

  • Reply 16 of 50
    dasanman69dasanman69 Posts: 13,001member
    sog35 wrote: »
    dasanman69 wrote: »
    There are plenty of saturated markets that have multiple players succeeding, and it's not always the player that came out with the revolutionary product that ends up having the most success.

    One word:  Ecosystem.

    Apple won't have any competition until someone else builds an ecosystem that can match or surpass Apple.

    Won't happen for at least a decade.

    It would have to start now in order for it to be fruitful in a decade. Apple didn't build their ecosystem overnight, and nobody else is going to be able to do it either.
  • Reply 17 of 50
    formosaformosa Posts: 261member
    Quote:
    Originally Posted by sog35 View Post

     

    Bezo's thought he was Steve Jobs for a moment.

     

    He paid for it.  They probably lost close to a billion on the Fire phone disaster.  Still not as bad as Microsoft who lost $10 billion on Nokia and Google that lost $7 billion on Motorolla.


     

    The early success of Kindle and FireHDX tablets probably went to Bezos' head, thinking he could just jump in at the high end smartphone segment and compete directly with Apple.

     

    I would give a little bit of credit to him, as he has had success with an OS that isn't Android and has an ecosystem (with Kindle). Samsung hasn't gotten critical mass yet with Tizen.

  • Reply 18 of 50
    am8449am8449 Posts: 364member
    And yet AMZN seems fine.

    I don't understand how the market gives AMZN so much latitude, and AAPL so little. Mind-blowingly irrational.
  • Reply 19 of 50
    dasanman69dasanman69 Posts: 13,001member
    formosa wrote: »
    sog35 wrote: »
     
    Bezo's thought he was Steve Jobs for a moment.

    He paid for it.  They probably lost close to a billion on the Fire phone disaster.  Still not as bad as Microsoft who lost $10 billion on Nokia and Google that lost $7 billion on Motorolla.

    The early success of Kindle and FireHDX tablets probably went to Bezos' head, thinking he could just jump in at the high end smartphone segment and compete directly with Apple.

    I would give a little bit of credit to him, as he has had success with an OS that isn't Android and has an ecosystem (with Kindle). Samsung hasn't gotten critical mass yet with Tizen.

    It's totally Android under the hood. They just forked it, and made their own app store.
  • Reply 20 of 50
    schlackschlack Posts: 708member
    Amazon read the signals wrong here. They should double down and make a better phone.
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