Amazon's Fire phone now only costs $1 if you buy it with a 2-year AT&T contract. When it launched a few months ago, it was $199. If only it had been priced at $1 when it launched in July, perhaps it wouldn't have been such a failure.
Although Amazon isn't releasing official numbers on units sold, the company did mention in its Q3 report today that it's taking a $170 million charge on inventory commitments, and that the massive hit is largely due the Fire phone's dismal sales. The company said it's currently stuck with $83 million worth of unsold Fire phones. That's a whole lot of phones sitting in warehouses, looking for good homes.
The Fire phone had potential, and could have at least broken even. But it started out with a few key (and seemingly obvious) mistakes. Most critically, it was overpriced for what it offered. Even with the one-year membership of Amazon Prime (valued at $99), it failed to deliver what consumers want: quality apps on quality hardware. By loading the phone with a stripped-down, custom version of Android, Amazon limited Fire users to a small app store and its own pre-installed software. Also, the phone feels cheap and flimsy when compared to an iPhone or other similarly priced Android devices.
To offset those shortcomings, Amazon loaded the Fire phone with a colorful and flashy interface that uses four cameras to give the homescreen a 3D-ish trick called "Dynamic Perspective." The Fire phone also got another trick: Firefly, a custom app that helps you buy things by just pointing the camera at the object you want to load into your Amazon cart.
Although interesting on a technical level, the gimmicks didn't pay off. The Dynamic Perspective trick is not particularly attractive. And Firefly is just plain creepy, too close to advertising. Smartphones have become a combination of a little black book, an entertainment device, and a social companion, so paying $200 for a phone who's only real unique feature was to serve as a vehicle for buying things was a non-starter.
The Fire phone's product page at Amazon lists over 3,000 user reviews, mostly negative---the average rating is two out of five stars.
